Time specifications in contracts have led to litigation worth millions. The phrase “by end of day Friday” has been contested in courts across jurisdictions. When money or rights depend on timing, ambiguity is expensive.
The Four Components of an Airtight Time Specification
Every contractual time reference should include:
- The date — In unambiguous format (7 February 2026, not 2/7/26)
- The time — In 24-hour format (17:00, not 5pm)
- The timezone — As a UTC offset or IANA identifier
- The location reference — Whose timezone governs
Example of a well-specified deadline:
"The Response Period shall expire at 17:00 UTC-5 (Eastern Standard Time) on 7 February 2026, being the local time at the Company's registered office in New York, New York."
Governing Timezone Clauses
Many contracts include a “Governing Time” clause that establishes which timezone applies to all time references in the document:
"All times specified in this Agreement shall be interpreted as local time in London, United Kingdom (GMT/BST as applicable at the relevant date)."
This single clause eliminates the need to specify timezones for every deadline. However, it introduces a DST dependency — “as applicable at the relevant date” accounts for the difference between GMT and BST.
The “Close of Business” Problem
“Close of business” (COB) is commonly used but inherently ambiguous:
- What time is “close of business”? 17:00? 18:00? When the last employee leaves?
- Whose business? The sender's office? The recipient's? The company headquarters?
- What if the business is closed that day (weekend, holiday)?
Better alternatives:
- “By 17:00 London time on [date]”
- “Before midnight UTC on [date]”
- “No later than 23:59 on [date] in the timezone of the receiving party's principal place of business”
Key Advice
In contracts, there is no such thing as an “obvious” time interpretation. Every time reference will be interpreted in the way most favourable to the party seeking to enforce or escape it. Remove the ambiguity before signing.
Have your legal counsel review time specifications specifically. Many contract templates use ambiguous phrasing that has never been tested in court — until it matters.