[Updated 12:05 p.m. EST Feb. 24, 2010]
Three variations on a closing theme:
Does “Closing” Refer to a Process or a Moment in Time?
Does closing mean the moment a transaction is consummated? Or does it refer to the process leading up to that moment, with contracts being finalized and signed, opinions being issued, and funds being sent [...]
When it occurs in contracts (apart from its use in the phrase specific performance), more often than not the word specific serves no purpose. Consider the following examples, which I harvested at random from the SEC’s EDGAR system:
Within 60 days following such request for a review, the Plan Administrator will, after providing a full and fair [...]
Here are some follow-up thoughts prompted by reader Chad’s comment to my recent post on use of the couplet fraud or intentional misrepresentation in indemnification provisions.
Chad suggested that although fraud includes intentional misrepresentation, at least three state courts have treated the terms fraud and intentional misrepresentation as synonyms. That doesn’t worry me, because if you use in the [...]
The other day a law-firm partner who specializes in M&A called me to discuss the terms fraud and intentional misrepresentation.
He noted that it’s commonplace for both terms to be used in specifying exceptions to limits on indemnification. Here’s the sort of provision he was referring to (I haven’t attempted to clean it up):
Notwithstanding the above, [...]
This from reader Chris Lemens:
This bugs me. I see a lot of nondisclosure agreements. A typical definition of the information protected by such an agreement includes a notion that the information is “confidential or proprietary.” The “proprietary” part just seems wrong to me. So what if the information is owned as property? A company’s website [...]
Today I had occasion to consider use of the phrase in particular in contracts. Here are some examples, taken from the SEC’s EDGAR system:
The Company has taken all reasonable steps to maintain the confidentiality of or otherwise protect and enforce its rights in its confidential information, in particular the trade secrets owned by the Company.
Each [...]
Today I saw the following in a contract I pulled from the SEC’s EDGAR system:
SunPower hereby guarantees that, subject to Section 22, it shall supply and deliver each of the Products to the delivery point specified in a given Purchase Order (each, a Delivery Point ) on or prior to the scheduled delivery date therefor [...]
You may recall my September 2009 post regarding my correspondence with Glenn West on that deathless subject, the phrase representations and warranties. (If you’re new to this subject, you may want to consult this handy 558-word summary of my analysis.) Well, Glenn couldn’t leave well enough alone—today I received from him an email on the subject, [...]
A reader recently asked me about use of the phrase ceteris paribus in contracts.
I was unfamiliar with this phrase—no Latin scholar I—so the first thing I did was consult Black’s Law Dictionary, which told me that ceteris paribus means “other things being equal.”
I then checked the SEC’s EDGAR system, from which I learned that of [...]
Reader Bob Bramson suggested to me that I have a look at GTE v. Cellexis, 341 F.3d 1 (1st Cir. 2003). So I did.
At issue was whether GTE could enforce its settlement agreement with Cellexis so as to preclude Cellexis from suing Cellco, a GTE affiliate that hadn’t been a GTE affiliate when GTE and [...]
Yesterday I revisited the question of the relationship between a license and the contract that grants the license.
This issue arose in connection with a trademark license agreement I’ve been redrafting. The original version says that the license is “nonassignable,” and I’ve been contemplating deleting that adjective on the grounds that the question of assignment of [...]
Today I encountered shall never in a contract. I think it’s a form of rhetorical emphasis—you’re saying the same thing as shall not, but you’re also banging your shoe on the table. So I never say shall never.
I was reminded today how the word product can be a nuisance when drafting, for example, a license agreement providing for a royalty based on products sold. Product can be used to refer to a product line, with its own SKU, or it can mean individual samples of a product line. I use the defined [...]
The words remit and remittance occur relatively often in contracts. Black’s Law Dictionary gives as one definition of remit “To transmit (as money) (upon receiving the demand letter, she promptly remitted the amount due).” And here’s how it defines remittance: “1. A sum of money sent to another as payment for goods or services. 2. [...]
A participant at my recent seminar in Ottawa reminded me of something I’d never paid much attention to—the idea that one should draft without punctuation. It’s a hoary old notion that still lingers in Commonwealth jurisdictions. Here’s what an Australian text has to say on the subject (footnotes omitted):
Traditional legal drafting uses punctuation sparingly. This [...]
Warning: grammar nerdiness ahead.
In license agreements I see the following two alternative constructions:
Acme hereby grants Widgetco a license to …
Acme hereby grants to Widgetco a license to …
The second alternative represents the inferior choice. Consider the following sentences:
I gave John a book.
I gave a book to John.
*I gave to John a book.
The first sentence matches the [...]
Someone recently asked me what I thought of using the word addendum in connection with contracts. I’m not crazy about it.
Black’s Law Dictionary defines addendum as “Something to be added, esp. to a document; a supplement.” So an addendum adds something to a contract, but it’s not clear whether you’re amending or supplementing the contract. [...]
The Wall Street Journal has published this article on use of the phrase throughout the universe in contracts. And below is the accompanying video. I’m featured fleetingly in both.
Most of my interview ended up on the cutting-room floor, presumably because my take on this subject was dreadfully earnest: The phrase throughout the universe, which I [...]
Recently the word irrevocably attracted my attention.
It means “unalterably.” And more often than not it’s redundant. That’s because generally when a contract party takes an action, it follows that absent anything in the contract to the contrary, the action can’t be undone.
Consider the following example:
Upon issuance of a Letter of Credit, each Lender will be [...]
The word formally occurs fairly often in contracts. It appears in 994 contracts filed as “material contracts” on the SEC’s EDGAR system in the past year. Here are some examples:
Lender may conclusively rely on such certificate until formally advised by a like certificate of any changes therein.
All written or formally presented information, including the Information [...]
One function of this blog is to give me a forum for screwing up without embarrassing myself too much. In this blog post from last month, I took a second crack at analyzing arising out of or relating to. Further reflection revealed that effort to be, well, lame, and I’ll be deleting it in the next [...]
I recently encountered the word draftsman in a law review article. That prompted me to give some thought to use of the word.
It’s certainly commonplace—a search of the TP-ALL database on Westlaw (“All Law Reviews, Texts & Bar Journals”) retrieved some 5,000 articles written in the last three years that use it.
I prefer to avoid [...]
As reported on ContractsProf Blog, the phrase except as otherwise specified in this agreement featured in newscaster Dan Rather’s contract with CBS. It also featured in a New York appellate court’s opinion in CBS’s appeal of the trial court’s refusal to dismiss Rather’s breach of contract claim against CBS.
At issue was the interplay of two contract [...]
Following on this September 18 post and this September 20 post, the saga continues: Glenn West, partner at Weil Gotshal and author of the two most useful articles on substantive contract law that I’ve come across in a long time, agrees with me on represents and warrants and representations and warranties. Below is the email [...]
It’s clear from reader feedback that I need to do a better job of explaining myself. Here goes:
It’s pointless and confusing to use in contracts the phrases represents and warrants and representations and warranties because …
Because my informal inquiries indicate that most lawyers treat the elements of those phrases as synonyms, much as they do [...]
While reading Lorne & Bryan’s discussion of representations and warranties I encountered the following statement:
Similarly, there should never be any objection to “representations” being made to the best of the knowledge of a party (as opposed to “to the knowledge” of a party, a phrase that is at best ambiguous and at worst contrary to [...]
[Updated Sept. 20 12:30 p.m. EDT: I realized that I needed to provide a more succinct version of my analysis. If that's what you're looking for, check out this blog item, which I just posted.]
I’ve previously explained why the phrases representations and warranties and represents and warrants are pointless and confusing. And that applies whatever [...]
For all my dwelling on relating to, I haven’t considered at what point something might be too remote to a given circumstance to be related to it.
That, of course, is a fact-driven issue that isn’t susceptible to generalization. But it can be useful to consider examples, and Vickie Pynchon provides one in this post on [...]
The other day I encountered in other words in a contract. An Edgar search indicates that it occurs often enough to be worth mentioning. In effect, in other words allows the drafter to take a second crack at articulating something. As a general matter, say something once, why say it again?
[Revised 2:00 p.m. Sept. 11 to reflect comment by randomjohn]
It’s commonplace for resolutions in board consents to state that something is advisable and in the best interests of the company. My first instinct was to say that is advisable and is redundant. But responding to my call for input, reader randomjohn pointed out that in [...]
Here’s a gripping issue: What should one call a contract requiring that certain information be kept confidential—confidentiality agreement or nondisclosure agreement?
What nondisclosure agreement has going for it is the convenient and universally recognized initialism NDA. By contrast, I’ve rarely seen CA used for confidentiality agreement.
Nevertheless, I prefer confidentiality agreement, because nondisclosure agreement expresses the concept [...]
[Update October 18, 2009: This post has been supplanted by this new post. I'll be deleting this post in the next few days.]
[Revised 12:45 p.m. EDT to mention, at the end of this post, a relevant May 2009 blog post.]
In my post on the AAA standard arbitration clause, I reiterated my doubts about the relating [...]
A standard way of giving notice under a contract is by overnight delivery by FedEx or one of its competitors. To articulate this notion, many drafters use the word courier, with varying degrees of specificity. For example, the phrase nationally recognized overnight courier occurs in 204 contracts filed on Edgar last month as Exhibit 10 material [...]
Reader Jason recently posted the following comment to my April 2007 post on including without limitation:
I just ran across an instance of including with limitation XXX.
I couldn’t determine if with limitation meant:
only;
that XXX is included, but with limitations on what parts of XXX are included; or
things that are limited, and XXX is one example of [...]
Today I noticed that someone said on Twitter that they were “drafting up a screenplay contract for legal revisions” (emphasis added).
That sent me to Google, where the search ["drafting up" contract] resulted in 4,090 hits . The search ["draft up" contract] resulted in 12,900 hits, but they included a greater proportion of irrelevant results, such as “You screwed [...]
I can’t recall ever having used the adjective contractual, meaning “of, pertaining to, or secured by a contract.” I find it an awkward mouthful.
As a general matter, I’d rather simply use contract, as in contract terms and contract obligations rather than contractual terms and contractual obligations.
And rather than referring to contractual instruments or contractual arrangements, [...]
A court opinion doesn’t have to come from an exalted court in order for it to raise an issue of interest to drafters generally.
A case in point is Managment Strategies v. Hous. Auth. of New Haven, 2009 Conn. Super. LEXIS 1550 (Conn. Super. Ct. June 2, 2009). In that case, the following release language was [...]
Thanks to reader Steven Sholk, I learned that the U.S. Supreme Court recently considered the “ordinary meaning” of the words because of. Here’s how the CCH Workday blog described the issue:
Construing this critical preposition in the text of the Age Discrimination in Employment Act (ADEA), a five-Justice majority concluded the statute’s requirement that an adverse [...]
Methinks forthwith has as a fusty, moldy air about it. I wasn’t surprised to see it included, along with the likes of hither and mayhap, in this list of quaintly archaic words.
But lo and behold, forthwith was used in 502 contracts filed in the past month on the SEC’s EDGAR system, as compared with 1704 [...]
At the 2008 ABA annual meeting I appeared on a panel with Kevin Kyte, partner at the Montreal office of Stikeman Elliott.
Kevin’s topic was things to bear in mind when drafting contracts governed by the law of a civil-law jurisdiction. It’s a topic I haven’t seen addressed in print, so I permit myself to bug [...]
I’ve previously written about whether to use stockholder or shareholder; see MSDC 12.336 and this blog post. (I say it doesn’t matter which you use.)
Here’s a related issue that’s just as thrilling: should you say shareholders’ agreement, with an apostrophe, or shareholders agreement, without the apostrophe? (Obviously the same debate applies to stockholders’ agreement.) Note [...]
Can astute contract drafting can forestall all contract disputes? No, it cannot. Most contract disputes, sure. But not all.
For example, vagueness is an essential tool for the contract drafter, as often the future is too uncertain to allow you to be precise. But being vague leaves room for future dispute.
And often parties rationally elect to [...]
In contracts and elsewhere, it’s standard to refer to remediation of environmental contamination. It’s also standard to use the verb remediate to refer to the act of remediation.
Garner’s Modern American Usage isn’t fond of remediate:
remediate, a back-formation from remediation, is either a needless variant of remedy or a piece of gobbledygook. E.g.:
“The evidence suggested that [...]
Black-and-white is simpler than shades of gray—the most straightforward MSCD recommendations are those urging you to scrap entirely a given word or phrase. Here’s a partial list of words and phrases that ideally would be absent from your contracts:
at no time
best efforts
covenant
for the avoidance of doubt
hereinafter referred to as
including but not limited to
including without limitation
in [...]
In MSCD 12.285–315 I explain why it’s pointless and confusing to say represents and warrants, not to mention representations and warranties. No one has made a serious attempt to refute my argument.
But recently I received an interesting report from the front lines. Knowing that I have a thing about represents and warrants, Trevor Grant of [...]
In MSCD 12.134 and in these blog posts, I recommend that you rid your contracts of the phrase indemnify and hold harmless. Most lawyers unthinkingly use indemnify and hold harmless as synonyms. And I’ve found that lawyers who instead think those concepts can be distinguished don’t agree on what they actually mean. So using both [...]
While researching the implications of the word deed (see today’s blog post on deed), I encountered a contract with the following concluding clause:
THIS AGREEMENT has been duly executed as a Deed on the date stated at the beginning of this Agreement.
The phrase executed as a deed also occurs in signature blocks. A variant is signed [...]
MSCD 12.148 and this May 2007 blog post consider the word indenture. Well, here’s another word for a particular kind of contract: deed.
Black’s Law Dictionary defines deed as “A written instrument by which land is conveyed” and “At common law, any written instrument that is signed, sealed, and delivered and that conveys some interest in [...]
I spent this morning in Toronto conducting a seminar at Rogers Communications, the Canadian communications company. David Miller, the general counsel of Rogers Communications, mentioned a requirement under Texas law that certain indemnification language be conspicuous. I’ve long been vaguely aware of that, so after the seminar I chased down further information.
The gist of it [...]
The word signatory is ambiguous. Black’s Law Dictionary defines signatory as “A party that signs a document, personally or through an agent, and thereby becomes a party to an agreement.” But it’s also used to mean someone who physically signs a contract, whether as a party or on behalf of party. For example, after “Title” [...]
