“Without Prejudice”

You remember my post asking for readers to suggest terms of art that can’t be replaced with something clearer (here)? I offer with prejudice. Here’s how Black’s Law Dictionary defines the phrase:

with prejudice, adv. With loss of all rights; in a way that finally disposes of a party’s claim and bars any future action on that claim <dismissed with prejudice>. See dismissal with prejudice under DISMISSAL (1).

It’s routine for contracts to refer to courts dismissing claims with prejudice.

Well, how about the phrase without prejudice? Here, again, is the Black’s definition:

without prejudice, adv. (15c) Without loss of any rights; in a way that does not harm or cancel the legal rights or privileges of a party <dismissed without prejudice>. See dismissal without prejudice under DISMISSAL (1).

So without prejudice would seem potentially broader than with prejudice. It seems to get most use in Commonwealth countries, where it’s primarily used as a heading in documents exchanged in settlement discussions. (Go here to see PLC’s glossary entry for the term.)

That being the case, what is without prejudice doing in U.S. contracts? Here are some examples from EDGAR:

(v) if all or any portion of such Defaulting Lender’s LC Exposure is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of the Issuing Bank or any other Lender hereunder, all letter of credit fees payable under Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until and to the extent that such LC Exposure is reallocated and/or cash collateralized; and

This Right of Setoff is without prejudice and in addition to any other right to which Holder is at any time otherwise entitled under this Note (whether by operation of Law, Contract, or otherwise).

Such resignation shall be without prejudice to the contract rights, if any, of the Trust.

Without prejudice and in addition to any other contractual remedy the non-defaulting Party may have under this Agreement, either Party may terminate this Agreement in writing forthwith, if …

Without prejudice to the representations, warranties or covenants regarding the status of any party hereto as a Citizen of the United States, each of Owner Participant, Owner Trustee and Trust Company agrees that, during the Term, in the event its status is to change or has changed as a Citizen of the United States or it makes public disclosure of circumstances as a result of which it believes that such status is likely to change, it will …

… then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights …

The phrase without prejudice would seem a product of the same bureaucratic instinct that gave rise to notwithstanding the foregoing. You’d be better off omitting it or using something simpler. For example, instead of shall be without prejudice to, you could say will not affect.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.

6 thoughts on ““Without Prejudice””

  1. Hmmm, I’m not so sure I’d want to forego “without prejudice,” which I have seen used in US contracts quite a bit over the last 30 years or more. Generally you find it when the contract grants a party a remedy for something, but doesn’t want it to be an exclusive remedy, so the locution “without prejudice to any other rights [or remedies] it may have…”

    Can you say the same thing differently? Sure. You can use variants on “non-exclusive,” you can say as you do “will not affect,” you can have a “remedies cumulative” clause, or some such, but I don’t see these as self-evidently superior, and I have never seen a non-lawyer reader of a contract express confusion over what “without prejudice” means.

    Reply
    • Now think about all the people in the world who are not native English speakers like me. And we deal with this useless jargon (English is international, so it is kind of world’s language, not exclusive only to natives anymore) and people really do not get this stuff. So, yes, a plain-language alternative is much better.

      Reply
  2. So if we reject omitting the thought completely from EDGAR examples and we resolve to restate the examples more simply, what happens?

    First Example:

    (v) if all or any portion of such Defaulting Lender’s LC Exposure is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to [read effect on] any rights or remedies of the Issuing Bank or any other Lender hereunder, all letter of credit fees payable under Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until and to the extent that such LC Exposure is reallocated and/or cash collateralized; and

    Second Example:

    This Right of Setoff is without prejudice [read effect on] and in addition to any other right to which Holder is at any time otherwise entitled under this Note (whether by operation of Law, Contract, or otherwise).

    Third Example

    Such resignation shall be without prejudice to [read will not affect] the contract rights, if any, of the Trust.

    Fourth Example

    Without prejudice [read Without effect on] and in addition to any other contractual remedy the non-defaulting Party may have under this Agreement, either Party may terminate this Agreement in writing forthwith, if …

    Fifth Example

    Without prejudice to [read Without effect on] the representations, warranties or covenants regarding the status of any party hereto as a Citizen of the United States, each of Owner Participant, Owner Trustee and Trust Company agrees that, during the Term, in the event its status is to change or has changed as a Citizen of the United States or it makes public disclosure of circumstances as a result of which it believes that such status is likely to change, it will …

    Sixth Example

    … then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to [read Without effect on] its future actions and rights …

    The improvement seems small at best in word or letter count. As a matter of semantic rigor, substituting “effect” (n.) or “affect” (v.) for “prejudice” (n. or v.) loses the negative meaning of “prejudice” — not every effect is prejudicial — and slightly changes the meaning. Fixing that by saying “without negative effect on” makes the substitute expression longer than the original.

    Alternatively, omitting the whole thought as unneeded — on the ground that remedies are obviously cumulative and non-exclusive — may not be very risky, but surely there’s some risk, extinguishable at the price of two or three extra words. Ounce of prevention?

    “Bibulus is watching the skies.”

    Reply
    • My main beef with prejudice in this context isn’t that it’s long-winded, but that it seeks to convey a meaning that’s at odds with the everyday meaning of the word. It reeks of the bureaucratic.

      Perhaps in your final example you could say “without limiting.”

      Reply

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