Business Days: How to Count Them

The term “business days” is common. It appears in delivery times, cancellation periods, and payment deadlines. This article clarifies its legal meaning. We’ll cover its relevance to mutual investment laws.

The concept seems simple, but it’s nuanced. Understanding “business days” is vital for commerce. It aids contract planning and prevents disputes. Imagine furniture arriving a month late, not 14 days. Or missing a cancellation window, leading to loss. These are common small claims court issues.

After reading, you’ll fully grasp “business days.” We’ll define them legally and explain their calculation. We’ll cover weekends, holidays, election days, eve of holidays, and weekend business. All your questions will be answered clearly.

Legal Definition of a Business Day

Surprisingly, the Interpretation Law lacks a uniform definition. “Business day” started in banking. It clarified credit and debit processing times due to rising transactions.

Over time, “business day” became a broad convention. It now covers many activities beyond banking. Global commerce uses “business days” for commitment periods. They define operating times or action deadlines (payments, deliveries).

Calculating business days depends on the context. Courts, for example, have their own methods.

For the broader commercial sector, distinctions fall into four main categories: (1) Consumer Protection; (2) Transactions under Standard Contracts (e.g., online purchases); (3) Banking; and (4) Capital Markets, Insurance, and Savings.

1. Calculating Business Days – Consumer Protection (48-Hour Refund Law Including Sabbath)

Israeli consumer protection is governed by the Consumer Protection Law, specifically regulating transactions between businesses and consumers. A separate article details exceptions to the Consumer Protection Law. While the law uses “business days,” it doesn’t specify calculation methods. In such instances, the Interpretation Law provides guidance.

These are the three fundamental rules for counting days according to the Interpretation Law (see below for months and years):

1. A “day” is not calculated proportionally. According to Section 3 of the Interpretation Law, a “day” runs from midnight (00:00) to the following midnight. Businesses often mistakenly equate two business days with 48 hours.
2. Unless otherwise specified, the count includes Saturdays and holidays, except when the last day falls on one: According to Section 10(c) of the Interpretation Law, rest days, holidays, or sabbaticals are included unless the last day falls on such a day.

For example: The Consumer Protection Law mandates that certain contract cancellations occur within 14 business days. If the 14th day falls on a rest day (Saturday), it is not counted, and the deadline shifts to the following Sunday.

Note: The business’s operating hours on rest days are irrelevant. If the last day falls on a rest day, the cancellation deadline is the following day.

3. The transaction day is not included in the count: According to Section 10(a) of the Interpretation Law, if a deadline is set in days or weeks from a specific date, that date is excluded from the count.

For instance, to cancel an order made on Wednesday, the 14-business-day count begins on Thursday, regardless of whether Thursday is a rest day.

Calculating Periods in Months or Years under the Consumer Protection Law

A prime example is the four-month cancellation period granted to certain groups (disabled individuals, senior citizens, and new immigrants). The deadline is the same date four months after the transaction. (Section 10(b) of the Interpretation Law)

For example: A transaction on January 1st allows cancellation until May 1st.

If a transaction occurs on the 31st, and the fourth month lacks that date, the deadline falls on its last day. For example: A transaction on October 31st, 2022. The four-month cancellation deadline is the last day of February (27th or 28th). This depends on whether it’s a leap year.

2. Calculating Business Days – Contracts, Work Orders, Online Orders

An order confirms delivery within seven business days. An online store might specify ten. A contractor promises delivery within 30 days. How are these periods calculated? Are the rules identical to consumer transactions?

Generally, yes, but with a key consumer-favoring difference. The same day-counting rules apply. However, contract law favors the weaker party. This applies when one party drafts the contract unilaterally. Ambiguous contracts are interpreted against the drafter. This holds true regardless of who drafted it solely.

This protection is particularly applicable to standard-form contracts drafted by businesses and presented to consumers. If such a contract allows for multiple interpretations, the interpretation unfavorable to the business will prevail. (Section 25(b1) of the Contracts (General Part) Law, 5733-1973).

When an order promises delivery in seven days, consumers often expect calendar days. Businesses, however, might interpret this as “business days.” In such disputes, the consumer’s understanding usually prevails. This is due to the business’s superior position in drafting the order form.

3. Calculating Business Days – Banking System

Unlike consumer protection laws, the banking system provides a specific definition in the Banking (Customer Service) (Credit and Debit of Checks) Regulations, 5752-1992.

Section 1 defines a “banking business day” as “any day except for Saturday, holidays, Rosh Hashanah, the eve and day of Yom Kippur, the first and last days of Sukkot, Purim, the first and last days of Passover, Independence Day, Shavuot, and Tisha B’Av.”

The Banking Supervisor can declare a specific day a non-business day only in exceptional circumstances where proper service provision is hindered, or if a significant portion of bank customers face operational difficulties.

The Interpretation Law lacks a “day” definition. However, Section 2(a) of Banking Regulations defines banking business hours. A banking business day starts when the prior day’s banking business ends. It concludes at 6:30 PM. On Fridays or holiday eves, it ends at 2:00 PM. This excludes the eve of Sabbath, Purim, Tisha B’Av, and the day before Yom Kippur eve.

The Banking Supervisor may specify earlier closing times for specific branches or deposit types, with prior branch notification.

Note that the Banking Regulations override some Interpretation Law provisions. Unlike consumer protection, the count begins on the same day as the relevant event, and calculations use specified business hours. The rule about excluding the last day if it falls on a holiday remains in effect.

4. Calculating Business Days – Capital Markets, Insurance, and Savings under the Ministry of Finance. What is the Mutual Investment Law?

Capital markets are governed by numerous regulations, mostly referencing the Mutual Investment Law. For example, Section 1 of the Income Tax (Rules for Approval and Management of Pension Funds) Regulations, 5724-1964, and Section 1 of the Supervision of Financial Services (Pension Funds) (Transfer of Funds Between Pension Funds) Regulations, 5768-2008, refer to the Mutual Investment Law.

These regulations govern, among other things, the timeframe for pension fund withdrawals and transfers between funds and investment tracks.

Definition of “Business Day” in the Mutual Investment Law

A business day is any day when most licensed banks under the Banking Law are open for business, excluding the eves of the following holidays: Rosh Hashanah, Yom Kippur, the first and last days of Sukkot, the first and last days of Passover, and Shavuot. These are considered rest days.

This definition does not supersede the Interpretation Law’s provisions regarding the meaning of “day,” the exclusion of the first day, and excluding the last day if it falls on a rest day.