Language of Concurrence?

There’s this:

On signing this agreement, the Sponsor is paying Acme $500,000 by check toward the cost of developing the Program.

I do believe that what we have here is that most rare creature, a candidate to join the categories of contract language. I’m inclined to call it “language of concurrence.”

But the bigger question is whether it serves a useful function. I’ve just started thinking about this. What say you?

Posted in Categories of Contract Language | 18 Comments

  • Chris Lemens

    Ken:

    I’m unclear on what the function of this sentence is that makes you think it represents a new category of language. From Acme’s perspective, it should want a promise to pay, if the payment hasn’t been received. From the Sponsor’s perspective, it should want one or both of (a) an acknowledgement of payment, if it has been made at the time of signing or (b) a prohibition on using the funds for things other than developing the Program. We have categories of language that cover all of those. What else do you see this language attempting to do?

    Chris

    • http://www.adamsdrafting.com/ Ken Adams

      See my response to Vinny, FWIW.

  • Vincent R. Martorana

    I don’t think that we’ve got a separate category here. I wouldn’t say “is paying.” If the Sponsor is submitting the check by virtue of signing the agreement (not sure how that would be the case…), then we’ve got language of performance and we should use “hereby.” If the Sponsor has already submitted the check by the time the agreement is signed, then we’ve got an acknowledgment and we should use “acknowledge.” If the Sponsor is obligated to submit the check once the agreement is signed (even if the check must be submitted on the date that the agreement is signed), then we’ve got language of obligation and we should use “shall” (e.g., “On the date of this agreement, the Sponsor shall pay…”).

    • http://www.adamsdrafting.com/ Ken Adams

      The parties are sitting around a table with copies of the contract to sign and a check. They sign the contract, and one party give the check to the other. I suggest that treating transfer of the check as an obligation to be complied with fragments the process in an artificial way.

      • Chris Lemens

        Ken:
        “Sponsor shall pay Acme $500,000 by check. Acme acknowledges receiving that check. Acme shall not use that payment for anything other than paying the cost of developing the Program.”
        Original version is 19 words. Revision is 29 words, mainly because I still don’t understand which of these effects the parties intended, so I covered all the ones I could think of. The revision assumes that Sponsor signs first and hands the check to Acme with the partially signed agreement. If not, then I’d use slightly different words. If that is the scenario, then you don’t need a time of performance on Sponsor’s payment.

        Chris

        • http://www.adamsdrafting.com/ Ken Adams

          Interesting, but I don’t know that it makes sense for someone to be under an obligation to pay if they’ve already handed over a check. Why not just have Acme acknowledge that the sponsor has paid?

  • Mark Anderson

    This is non-lawyer parties focussing on the actions, using an all-purpose continuous present tense, rather than the obligations. It is just bad contract drafting and bad writing.

    Different, but similarly irritating, to this use of the present: http://www.theguardian.com/media/2014/jul/28/melvyn-bragg-john-humphrys-tense-encounter-radio-4

    • http://www.adamsdrafting.com/ Ken Adams

      So what would you say?

      • Mark Anderson

        Best guess without all the background:

        On signature of this Agreement, the Sponsor shall pay Acme US$500,000 (by check) as a contribution to the cost of developing the Program.

        • http://www.adamsdrafting.com/ Ken Adams

          I get the feeling that language of concurrence will have but a brief shining moment in the categories-of-contract-language spotlight …

        • http://www.adamsdrafting.com/ Ken Adams

          Hmm, what does “on signature” means? Necessarily, payment would have to happen after the contract is signed, but how long after would still be “on”?

          • Mark Anderson

            Depends on signing process. Some parties will expect cheque (check) to be brought to signing meeting. Others will invoice on or about day of signing and expect invoice to be paid within any period stated in contract for payment of invoices, eg 30 days.

          • http://www.adamsdrafting.com/ Ken Adams

            I think one can be too quick to dismiss this option. Ultimately it might not make the grade, but it captures what stating it as an obligation does not capture: signing and payment are being treated as concurrent. Saying that it’s bad drafting doesn’t make it so; why is it bad drafting? And I’m not sure what you mean by saying that it’s bad writing.

            It might be relevant that this sort of structure occurs in recitals. For example, “Concurrently with entry into this agreement, the parties are entering into a noncompetition agreement.” In the body of the contract it might be stated that it’s a condition to entry into this agreement that the parties enter into the noncompetition agreement.

          • Mark Anderson

            Well, perhaps. I am struggling to think of a situation where I would want to mention the payment without clearly stating it as some kind of obligation or condition, or alternatively as a non-binding payment, eg a charitable donation.

            As for bad writing, it jars (at least to my ear) to say that on a stated event (signing), someone is paying. Not sure exactly why. It works better in your last example above, but I am still not sure I would use that formula. I might put it in the past tense, though I can see why that might be wrong.

          • http://www.adamsdrafting.com/ Ken Adams

            For an alternative approach, see my take on Chris’s suggestion.

  • Jason McInnes

    I don’t understand this either. I might put something like this in a recital if someone thought it was important to note that a check was being delivered at the time of execution. But what if the check bounces? I’d rather have an obligation to pay the $500,000 in immediately available funds with the funds received by the payee within X days of the effective date of the agreement or something like that. No?

    • http://www.adamsdrafting.com/ Ken Adams

      OK, let’s say that it’s a certified bank check. What do you make of it now?

  • AWrightBurkeMPhil

    Joining the party late, I note:

    1/ “Simultaneity” might be better than “concurrence” as a label, because “concurrence” also means “agreement,” as in “i concur.”

    2/ A declarative sentence that something else is happening at the same time the agreement takes effect no more warrants a separate category than does “language of dog ownership,” consisting of declarative statements about who owns one or more dogs. They’re each specific without being categorical.

    3/ Shamelessly sliding off topic, isn’t every category of contract language a subset of language of agreement, because every contract begins “The parties agree as follows,” so that every sentence thereafter is implicitly prefaced by “The parties agree that”?
    –Wright Burke