“Shall Not Allow”

It’s routine for one post to beget another.

My post on shall not negligently (here) was prompted by the following contract language:

Company will not, and will not knowingly or negligently allow any third party to [do various things].

In a comment, David Ziff considered the implications of using just shall not allow, with negligently omitted.

I agree with David. On its face, shall not allow (or permit) looks like a flat obligation. If you say (to tweak the example I use in the shall not negligently post) GuardCo shall not allow visitors to touch the cars and one or more visitors touch the cars, it would seem that GuardCo has failed to comply with that obligation.

But I could just as easily argue that to comply with a shall not allow obligation, the party in question simply has to make it a policy not to allow the activity in question. (They might post a sign saying “X not allowed!”) If it happens anyway, arguably that has no bearing on breach.

That’s why my proposed language in the shall not negligently post uses shall … prevent instead of shall … not allow.

But I wouldn’t be happy with a flat obligation using shall prevent either. That’s because if a party doesn’t have complete control, it doesn’t make sense to impose a flat obligation. Instead, I’d use a reasonable efforts standard and provide for indemnification (as David suggests) or liquidated damages if (using the same example) some visitors end up touching the cars, despite GuardCo’s reasonable efforts to prevent them from doing so.

Posted in Categories of Contract Language, Selected Usages | 1 Comment

  • Mark Anderson

    Part of the problem is the two different meanings of allow. I am reminded of very old fashioned language that says a party shall not “suffer or permit” another to do X. Both of those words also have multiple meanings. Perhaps the drafter thought “knowingly or negligently” helped to clarify the obligation, but I agree with your reasons for disliking that phrase, and would go further and say that it mixes apples and oranges as well as introducing confusing tort words. If you have to use such a phrase, try intentionally or carelessly, but much better to avoid altogether.

    Your solution seems good to me though I would want to check it worked in an individual case. How much control does the actor have? Eg if the obligation is on a Board of Directors not to register a new shareholder as shareholder, none of these words is correct as the action is within the Board’s control, but if the action is not to sell share to X that would result in X becoming a majority shareholder, a knowledge element is introduced, ie knowing what % they have already.

    Maybe a better example would be the Tenant shall not allow its staff to smoke in the street (a common sight in many urban streets as anti-smoking laws get progressively tighter; I have just been sent a marketing email inviting me to buy a shelter for my staff so that they can do so without getting rained on, the poor darlings). Depending on how the term is worded, Prevent might be too strong an obligation.