The word directly comes in handy if you want to say in a contract that a party is allowed to do something, or is prohibited from doing something, directly or indirectly. Some examples from the Berkeley Pit that is EDGAR:
Executive shall not directly or indirectly render any services of a business, commercial, or professional nature to any other person …
To facilitate redemption of Shares by shareholders directly or through dealers …
… and are owned by the Company, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim.
But directly on its own can be redundant. That’s because unless the context suggests otherwise, a direct connection is implicit:
Sargent agrees that he will cause the Company to pay all rent, additional rent and other obligations of the Company due under the lease agreement for certain real property previously executed by the Company (the “Lease”)
directlyto the landlord of such Lease …WHEREAS, each Grantor has determined that the execution, delivery and performance of this Agreement
directlybenefit, and are in the best interest of, such Grantor;… other than office space located on the premises of the Project where not more than a de minimus amount of the functions to be performed are not
directlyrelated to the day-to-day operations of the Project …In his capacity as Chief Executive Officer of the Company , the Executive will report
directlyto the Board.pursuant to which a Participant may concurrently provide irrevocable instructions … to the Company to deliver the certificates for the purchased Shares
directlyto such broker or dealer in order to complete the sale;Investor has a substantive pre-existing relationship with the Partnership and was
directlycontacted by the Partnership or its agents.The Company will reimburse Maxim
directlyout of the proceeds of the Placement.
Furthermore, in everyday English directly can connote not agency but urgency, as in In an emergency, go directly to the assembly point. To avoid confusion, use immediately or promptly instead of directly if you wish to express urgency. (For more on immediately and promptly, see this 2008 post.)
There’s lurking murk in this issue that calls for drafter’s vigilance.
1/ In the first EDGAR example, the unclarity of the distinction between directly and indirectly rendering services shows itself if you split them: ‘Executive shall not render services to any other person directly, but may do so indirectly’ (or vice versa). Prohibiting or allowing both makes the distinction unimportant.
2/ The third EDGAR example treats ownership by subsidiaries as indirect ownership by the parent company. ‘Indirectly’ may have different meanings depending on whether a subsidiary is part of the company or a separate legal entity.
3/ Corporations and other artificial persons cannot act except by agents, so a drafter must not carelessly equate ‘action by agents’ with ‘indirect action’.
4/ The sixth ‘redundant’ example from EDGAR is problematic in a the same way: ‘Investor has a substantive pre-existing relationship with the Partnership and was contacted by the Partnership or its agents’. If the partnership is an entity, it cannot contact anyone ‘directly’ if that means ‘not by agents’. The provision might better have said, ‘was contacted by Partnership agents’, or to eliminate the needless passive, ‘Partnership agents contacted [the] Investor’. (If the partnership is an aggregate, not an entity, the drafting goes in a different direction.)
I commend you for applying more energy to this than I could muster. My goal was to point out a problem in a mess of problems. I wouldn’t dream of trying to rehabilitate the examples I dredge up.
Why do we specify “directly or indirectly” anyways? Couldn’t it be removed altogether?
For example, if I say “X shall not do Y” isn’t it implied that X shall do not Y either directly or indirectly? I’d imagine it would be hard to argue that X doing Y indirectly was permissible under that term.
Thanks in advance for your reply,
Jawad