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 deemed to have irrevocably and unconditionally purchased from Issuing Bank, without recourse or warranty, an undivided Pro Rata interest and participation in all LC Obligations relating to the Letter of Credit.
It makes no sense to say that a party has irrevocably purchased something: once you purchase something, it stays purchased, unless you’ve established procedures for return.
Here’s another example:
Each Borrower hereby irrevocably releases and forever discharges the Agent, the Lenders and their respective Affiliates ….
Once you release something, it’s gone, without any way for you to claw it back. So having a party irrevocably release something does nothing other than add a surplus and potentially confusing word to what would otherwise be clear language.
And a third example:
The Borrower irrevocably waives the right to direct the application of any payments or Collateral proceeds ….
As in the second example, if a party waives a right, as opposed to, say, waiving isolated breach of an obligation, it couldn’t reasonably argue that it should somehow be able to get that right back. (Am. Jur. Estoppel § 200 says “It is well settled that a waiver once made is irrevocable, even in the absence of consideration, or of any change in position of the party in whose favor the waiver operates.”) So adding irrevocably would serve no purpose. But more to the point, I suggest that instead of having a party waive a right it would be preferable to use language of prohibition, more specifically is not entitled to; see MSCD 1.53–54. That would result in the above example saying instead “The Borrower will not be entitled to direct the application of any payments or Collateral proceeds ….”
But it makes sense to use irrevocably with the verb appoint, as in this example:
Holdings and each Borrower irrevocably appoints Agent as its attorney-in-fact to collect such balances to the extent any such delivery is not so made.
That’s because generally the power to appoint someone to a position includes the power to remove them, too. If you don’t want that to be the case, you should say so, and irrevocably seems as good a way as any to accomplish that.
Let’s end with another inappropriate use of irrevocably:
Each Holder hereby irrevocably agrees to submit for exchange, all Notes owned by such Holder, in the principal amount set forth on such Holder’s signature page hereto ….
Agrees to is an inferior alternative to shall for expressing obligations (see MSCD 2.58), so irrevocably agrees to in effect suggests that a party can at will back out of contract obligations. That’s a desperately wrongheaded notion.
Ken:
Licenses are another good place to say irrevocable. Licenses can be term or perpetual, and even perpetual can still be terminable. So, it’s good to say irrevocable if the licensor can’t take it back; and it’s good to say it is terminable or revocable if it is.
Chris
Chris: I actually have in mind looking at the adjective irrevocable, as opposed to the adverb irrevocably, in a future blog post. I’ve previously considered in this August 2008 blog post use of irrevocable in granting language. Ken
The problem, Ken, is this: Suppose the contract is silent on revocability. Sure as shootin’, some litigator will argue that, under the circumstances, his poor, maltreated client has an inherent right to revoke, because otherwise it would just be so … unfair.
That’s one reason contracts are so long: because the drafters feel they have to expressly negate things that shouldn’t have to be negated in the first place.
Ken, why would you suggest replacing “irrevocably waive the right to” with “is not entitled to,” when “may not” seems to work just as well and is more direct and simple?
Unfortunately, however, I think D. C. hits the nail square on: without any express disclaimer of revokability, someone somewhere will surely argue for it. And might succeed.
D.C.: I acknowledge that avoiding a fight is much preferable to prevailing in a fight. But as usual, you have to weigh the risks. Regarding waiver, the authorities are clear as can be that a waiver of a right is inherently irrevocable. And in a quick scan of the caselaw I didn’t see any sign that it’s something that people are inclined to fight over. So I’m comfortable that the benefits of omitting irrevocably outweigh any risks. Ken
Richard: Your question touches on a distinction that I’ll be blogging about shortly. Using instead shall not (which I prefer over may not; see MSCD 2.151) would doubtless work, but it misses a nuance. In the example in question, it isn’t that the borrower is prohibited from directing the bank; instead, the borrower doesn’t have the power to do so. Ken
Ken – you cite caselaw but we all know caselaw changes, judges often distinguish it, and it varies from country to country. Since the lawyer is the first person to blame when something goes wrong, rather than arguing something like this out in court somewhere, I would still say “irrevocably”. I dont see any risk in using it but there is a potential risk in not doing so.
Euan: My starting point isn’t specific caselaw but rather the general consensus as to the meaning of, for example, waiver and release.
As regards the downside of adding irrevocably to that which is already irrevocable, it muddies the waters. As regards the ostensible benefits, I’d be interested to have someone direct me to recent caselaw in which someone claimed that although they had waived a right or had released someone from an obligation, one is as a general matter entitled to reverse a waiver or release.
And in what context are you going to use irrevocably? Some of the uses I cite are less reasonable than others.
But note that I haven’t entirely made up my mind about this issue. After all, I’ve only just become aware of it.
Ken