Comments on: “At Its Discretion” Used in Language of Discretion http://www.adamsdrafting.com/2006/12/11/at-its-discretion-used-in-language-of-discretion/ Thu, 18 Mar 2010 12:12:39 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Richard http://www.adamsdrafting.com/2006/12/11/at-its-discretion-used-in-language-of-discretion/comment-page-1/#comment-94652 Richard Tue, 12 Jan 2010 21:35:27 +0000 http://www.adamsdrafting.com/2006/12/11/at-its-discretion-used-in-language-of-discretion/#comment-94652 Ken, I really like your commentary. But I think your approach to this topic is a bit cumbersome and likely to be objected to in a commercial agreement--"for any reason" plus "consider only its own interests" plus "will not be required to consider the effect [on the other party]" is overdoing it. Also, why not include the concept of reasonableness in this clause to address your concern regarding good faith—"in its reasonable discretion?" Ken, I really like your commentary. But I think your approach to this topic is a bit cumbersome and likely to be objected to in a commercial agreement–”for any reason” plus “consider only its own interests” plus “will not be required to consider the effect [on the other party]” is overdoing it. Also, why not include the concept of reasonableness in this clause to address your concern regarding good faith—”in its reasonable discretion?”

]]> By: AdamsDrafting » Blog Archive » “May But Is Not Required To” http://www.adamsdrafting.com/2006/12/11/at-its-discretion-used-in-language-of-discretion/comment-page-1/#comment-9312 AdamsDrafting » Blog Archive » “May But Is Not Required To” Fri, 28 Sep 2007 14:44:58 +0000 http://www.adamsdrafting.com/2006/12/11/at-its-discretion-used-in-language-of-discretion/#comment-9312 [...] By the way, this usages is related to may at its discretion. [...] [...] By the way, this usages is related to may at its discretion. [...]

]]> By: Chris Lemens http://www.adamsdrafting.com/2006/12/11/at-its-discretion-used-in-language-of-discretion/comment-page-1/#comment-2806 Chris Lemens Wed, 07 Mar 2007 22:07:06 +0000 http://www.adamsdrafting.com/2006/12/11/at-its-discretion-used-in-language-of-discretion/#comment-2806 Ken: Suppose you have a termination for convenience clause that reads, "Either party may end this agreement by giving thirty days' prior notice to the other party." Would you contend that this is language of discretion limited by the duty of good faith and fair dealing, such that the non-terminating party could challenge the termination if they thought that it was due to unfair, bad faith behavior? Ken:

Suppose you have a termination for convenience clause that reads, “Either party may end this agreement by giving thirty days’ prior notice to the other party.”

Would you contend that this is language of discretion limited by the duty of good faith and fair dealing, such that the non-terminating party could challenge the termination if they thought that it was due to unfair, bad faith behavior?

]]> By: mike http://www.adamsdrafting.com/2006/12/11/at-its-discretion-used-in-language-of-discretion/comment-page-1/#comment-1489 mike Thu, 14 Dec 2006 18:34:22 +0000 http://www.adamsdrafting.com/2006/12/11/at-its-discretion-used-in-language-of-discretion/#comment-1489 Ken - My objection to the first is that the language is considerably more colloquial than I prefer, but it is relatively concise. Yours doubles the length and might be used as evidence that not following through on some other permissive obligation (which is not similarly qualified) is breach. Also, the idea of an "annual bonus" makes it sound like it should occur annually. Last, we're missing the context in which this provision is used, but I would prefer something more like: "In addition to the compensation specified in clause 5.3, compensation includes bonuses, if any, offered by Company to Employee." Ken -
My objection to the first is that the language is considerably more colloquial than I prefer, but it is relatively concise. Yours doubles the length and might be used as evidence that not following through on some other permissive obligation (which is not similarly qualified) is breach.

Also, the idea of an “annual bonus” makes it sound like it should occur annually.

Last, we’re missing the context in which this provision is used, but I would prefer something more like:

“In addition to the compensation specified in clause 5.3, compensation includes bonuses, if any, offered by Company to Employee.”

]]> By: Ken Adams http://www.adamsdrafting.com/2006/12/11/at-its-discretion-used-in-language-of-discretion/comment-page-1/#comment-1454 Ken Adams Tue, 12 Dec 2006 21:57:15 +0000 http://www.adamsdrafting.com/2006/12/11/at-its-discretion-used-in-language-of-discretion/#comment-1454 A reader emailed me some "discretion" contract language and asked me how I might revise it. Below is his language; below that is my version. His version: "In addition to the compensation specified in clause 5.3, the Employee may receive an annual bonus in the absolute discretion of the Employer, which bonus may not be given at all in any year." My version: "In addition to the compensation specified in section 5.3, the Company may in any given year pay the Employee a bonus in an amount determined by the Company. The Employee acknowledges that failure by the Company in any given year to pay a bonus or to pay a bonus in a given amount will not constitute breach by the Company of its obligations under this agreement." A reader emailed me some “discretion” contract language and asked me how I might revise it. Below is his language; below that is my version.

His version: “In addition to the compensation specified in clause 5.3, the Employee may receive an annual bonus in the absolute discretion of the Employer, which bonus may not be given at all in any year.”

My version: “In addition to the compensation specified in section 5.3, the Company may in any given year pay the Employee a bonus in an amount determined by the Company. The Employee acknowledges that failure by the Company in any given year to pay a bonus or to pay a bonus in a given amount will not constitute breach by the Company of its obligations under this agreement.”

]]> By: Debora Pinkas http://www.adamsdrafting.com/2006/12/11/at-its-discretion-used-in-language-of-discretion/comment-page-1/#comment-1441 Debora Pinkas Mon, 11 Dec 2006 17:02:25 +0000 http://www.adamsdrafting.com/2006/12/11/at-its-discretion-used-in-language-of-discretion/#comment-1441 Thanks so much for your thought provoking postings. I find them useful and stimulating. Debora Thanks so much for your thought provoking postings. I find them useful and stimulating.

Debora

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