The meaning of a business day or a banking day affects specific contract performance in Nigeria. Usually, a business day is any day except Saturdays, Sundays, and Government-approved public holidays. A banking day is any day banks are generally open for business. So, would the ongoing Nigeria’s #EndBadGovernance affect specific contract performance?
Background
The doctrine of force majeure posits that a party to a contract is not under a duty to perform its obligation if natural causes or governmental actions make the contract’s performance unreasonably difficult or impossible.
Elliots Schools in Ikoyi secured one million United States Dollars in green energy expansion funding from a consortium of microfinance banks in May 2023 under a one-year moratorium.
Elliots Schools’ loan repayment started in June 2024. The loan facility included traditional force majeure boilerplates but only conditioned repayment on business days.
Unfortunately, Elliots Schools’ lawyers did not modify business days to exclude days when banks are not generally open for business in Lagos State – Lagos being Nigeria’s commercial nerve centre.
With the ongoing #EndBadGovernance protest, which is not a riot yet, Elliots School may unsuccessfully rely on the force majeure. Nor can Elliots School invoke the narrow definition of a business day under the facility offer letter.
Our education lawyers submit in the commentary that transaction lawyers must expand the meaning of business days to include banking days, where such may impact contract performance.
Regulatory Definition of Business Day in Nigeria
Specific laws and regulations in Nigeria, including Court Civil Procedure Rules, define business days as any day other than Saturdays, Sundays, or Government-approved public holidays.
Central Bank of Nigeria’s (CBN) payment or financial services regulations generally define business days as any day other than a Saturday, Sunday, or public holiday.
Meaning of a Banking Day
A banking day is the part of a business day on which every bank’s branch is open to the public for substantially all banking services.
The Godwin Emefiele-led CBN ordered Nigerian banks in 2023 to work on Saturday during the haphazardly implemented cashless policy. Such days were banking days.
Evolving Commercial Approach to Business Days
Nigerian laws provide the minimum definition of a business day. The sanctity and freedom of contract permit parties to expand the meaning of business days, where appropriate.
Suppose parties may not validly exclude a weekday that is not a public holiday from the meaning of a business day. In that case, designating a weekday, not a public holiday, seems to push the bounds of contractual freedom too far.
Broader Definition of Business Day
Where a contract performance depends on or is affected by the meaning of a business or banking day, we recommend a business day include a banking day when banks are not generally open for business in Lagos State.
Where the context allows, public holidays should be defined to include Federal or State Government-approved holidays. Recollect that until 2018, June 12 was a holiday in Lagos State only.
Conclusion
Given the narrowing jurisdictional limitation in international commercial transactions, Nigerian lawyers must consciously substitute Lagos State for other global commercial cities such as “days in which banks are generally open for business in London, the United Kingdom” or other commercial cities.
This distinction is relevant because Nigeria’s #EndBadGovernance protest is not yet a riot. The present #EndBadGovernance may not decisively trigger a force majeure.
An expanded meaning of a business day is necessary in hedging contractual risks and exposures.
SRJ Legal is Nigeria’s first bespoke and dedicated education law practice. We complement our education law with fintech and dispute resolution (litigation). We provide corporate counsel services to schools, educational non-profits, alumni associations, regulatory bodies, and parent-teacher associations.
