Days of grace is used in the context of bills of exchange, it refers to those extra days which the borrower gets for paying to the creditor. Failure to pay after the grace period can be disastrous for the borrower as it can lead to legal implications against him or her. Given below is the example of days of grace –
Suppose a bill of exchange which is drawn on 1st march and payable after 3 months and grace days are 4 (usually it is 3) than due date for repayment will be 5th June. If suppose there is holiday on 5th than due date for repayment will be one day earlier that is 4th June.