Consider this sentence: After termination, Acme will have 60 days to return to Widgetco any Confidential Information in Acme’s possession.
What category of contract language should that be? Presumably obligation: No later than 60 days after termination, Acme shall return to Widgetco any Confidential Information in Acme’s possession.
How about this one: After termination, Acme will have 60 days to exercise the Option by notice to Widgetco.
What category of contract language should that be? Presumably language of obligation used to express a condition: To validly exercise the Option, Acme must no later than 60 days after termination notify Widgetco that it is doing so.
So X will have [time period] is not only casual but ambiguous. Add it to the no-draft list.
Now the only question is whether I try to shoehorn it into MSCD4.
A few comments:
1/ The ambiguity is not in ‘will have’ but in ‘to’. Having a period ‘to’ do X can mean ‘to discharge a duty to do X’ or ‘within which X is possible, permitted, or effective’.
2/ That said, ‘will have’ is still objectionable as circuitous: If the provision as a whole sets up a duty, use ‘shall’. If it grants discretion, use ‘may’. Be as direct as possible.
3/ I think with regard to any dubious specimen sentence, the first question cannot be ‘what category of contract language should that be?’, but ‘what is the drafter trying to do?’ The answer to that, if discernible, will usually point to the proper category of contract language to use.
4/ In the first specimen sentence, the drafter is pretty obviously trying to impose a duty, and should choose ‘shall’ as language better suited to that goal.
5/ In the second specimen, the drafter is pretty clearly trying to grant discretion. If so, she should choose ‘may’. (The specimen is arguably a bit uncertain about whether the 60 days is a safe harbour period or an exclusive period, but that’s not a category issue and is easily fixed anyway.)
6/ I don’t like the formula ‘To validly exercise the Option, Acme must no later than 60 days after termination notify Widgetco that it is doing so’ because I analyse it as a suboptimal way of expressing an obligation subject to a condition, in which the ‘to validly exercise’ clause is a suboptimally-framed matrix clause (=’Widgetco shall honor the exercise of the Option’) and the ‘Acme must’ clause is a suboptimally-framed conditional clause (=’if Acme timely notifies Widgetco that Acme is exercising the Option’). The ‘to validly exercise’ formula (a) buries the identity of the party under the duty, and (b) adds a needless (and less informative) variant to the standard way of expressing an obligation subject to a condition (=conditional clause + matrix clause, or vice versa).
7/ No to the shoehorn.
Regarding 1/, yeah, but I don’t think you can attribute ambiguity to just one word like that.
Regarding 3/, it’s unrealistic to expect drafters to diagnose verb structures just by asking themselves, “What is the drafter trying to do?” If you based the inquiry on the categories of contract language, you know that all you have to do is cycle through the alternatives.
Regarding 6/, ???????
What a great blog and such a talented guy. It’s great to see someone so dedicated to the art of law.
Glad you approve. Hey, I try!
For the Option issue, why not use “shall”? I thought you said “must” is for third party obligations. There’s an obligation for Acme to exercise the option within 60 days after termination.
No, it’s not an obligation: failure to exercise doesn’t give rise to a remedy. Instead, timely exercise is a condition to valid exercise. This is one use of must; it’s also used to state how the parties want a nonparty to act.