With the Christmas holiday period just around the corner, a recent court decision [1] highlights the possible dangers of trying to serve formal notices during such period and, if doing so, the need to follow any agreed notice provisions.

“…he’s not answering…” 

A bank had entered into a 1992 ISDA Master Agreement with its customer in relation to a five-year interest rate collar transaction (the ‘Collar’). The bank had the option to extend the term of the Agreement if it served a notice to do so. Because the Collar was “deep deep in the money” (as one of the bank’s traders expressed it) in the bank’s favour, it was decided to exercise the option.

The notice had to be served by the bank by 11.00am on 30 December. The relevant clause in the Agreement stated that notice ‘may be given’ by one of the methods listed – in writing, delivered in person, by telex or fax, by registered mail or by an electronic messaging system (which the judge held did not include email).

On the morning of 30 December, attempts to send the extension notice by fax failed. Increasingly frantic efforts were made to contact the customer; however, the business was closed over the holiday period. The notice was eventually sent by email before the 11.00am deadline; a message was also left on the customer’s voicemail.

The outcome

The customer was successful in its claim that the Collar had not been validly extended. An attempt was made to argue that, as the clause said that a notice ‘may’ be given by certain methods, that did not exclude using other methods (such as email or voice mail). The court rejected this argument – ‘may’ was not usually mandatory but, when it was combined with a list of options, that indicated that they were the only permitted ones. The judge quoted a famous example given in a House of Lords case [2]:

“If the clause had said that the notice had to be on blue paper, it would have been no good serving a notice on pink paper, however clear it might have been that the tenant wanted to terminate the lease.” 


Notice clauses can and do mean something, as this case shows. Leaving things to the last day (or, indeed, the last hour or so) is rarely to be recommended, especially when the last day falls in the Christmas/New Year period.

For more information, email

[1] Greenclose Limited v. National Westminster Bank plc [2014] EWHC 1156 

[2] Mannai Investment Co Ltd v. Eagle Star Life Assurance Co Ltd [1997] AC 749

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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.