What’s the Point of This Provision Specifying Drafting Conventions?

I recently saw in a contract the following provision specifying drafting conventions:

Reference to any English legal term shall, in respect of any jurisdiction other than England, be deemed to include what most nearly approximates in that jurisdiction to the English legal term.

The contract in question is governed by English law. It follows that if the contract uses, say, the term warranty, it’s to be given the meaning it has under English law, regardless of where the parties are from and regardless of where the transaction is taking place. That being the case, I’m not sure what this provision is trying to accomplish.

Of course, it would be best to use sparingly terms of art such as warranty—even if there’s no question which law applies, those negotiating a contract or monitoring enforcement might well assume, incorrectly, that a particular term of art has the meaning it has under the law of another jurisdiction. And besides, terms of art are fruitful source of confusion, as discussed in MSCD and this 2012 post.

In that regard, in MSCD and this 2007 post I discuss ways to limit your use of warranty.

  • Mark Anderson

    I don’t recall seeing this provision, but I could see it might be useful – though perhaps not for terms that directly impose obligations, such as warranty. When I Googled the clause, one of the first hits was for some terms that said that good were to be held on trust for the seller until paid for in full. As I understand it, the legal concept of trust is not known in all legal systems. Another term referred to the insolvency of a party and the appointment of liquidators, which might not be the correct expressions in the buyer’s territory.

    Ideally one would use the correct legal expressions for the other party’s territory, but it may not be cost-effective or realistic to seek legal advice in all territories in which the terms are used.

  • Vance_Koven

    My suspicion is that the contract may be one that the drafter intended to use in a variety of commercial contexts, and in which the counter-party might wish to negotiate for some other jurisdiction’s law. Substantively, of course, the clause is ridiculous–just imagine how a French court would come up with a domestic legal equivalent for, say, “the security shall be held in trust.”