Ambiguity in Specifying the Time of Day

Reader Matthew pointed out to me an ambiguity I hadn’t thought of.

Here’s the language at issue:

If the Escrow Agent receives from the Seller a Counter Notice before 2:00 p.m. on the date that is 20 Business Days after the Escrow Agent received the corresponding Claim Notice, the Claim must be resolved in accordance with section X.

Matthew was concerned that this could be read in two ways: Meaning one is that a Counter Notice would be valid if delivered any time during the 20 business days up to 2:00PM on the 20th business day. And meaning two is that to be valid, a Counter Notice would have to be received on the 20th business day before 2:00PM, as opposed to any of the preceding 19 business days.

I agree with Matthew that although meaning one is presumably what had been intended, meaning two is also possible. And whenever you have such ambiguity, you have the potential for a dispute.

Here’s the language I’d use to convey meaning one unambiguously:

If the Escrow Agent receives from the Seller a Counter Notice by 2:00 p.m. 20 Business Days after the Escrow Agent received the corresponding Claim Notice, the Claim must be resolved in accordance with section X.

I eliminated on the date that is. That served to eliminate the focus on the 20th Business Day.

I asked Matthew about the reference to 2:00 p.m., which seemed unusual. (I suggest in MSCD 9.16 that midnight is the best time of day to use for specifying a point in time by which something has to be done.) He explained that the company in question is a trust company—because of their internal controls, they prefer to account for escrow notices, objections, and such like by 2:00 p.m. on each business day. In addition to facilitating internal reporting during business hours, it also allows them to initiate wire transfers on the same day in urgent circumstances or if an agreement so requires.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.