When in my “Language & Layout” seminars we discuss categories of contract language, I emphasize that in addressing a given issue one sometimes has a choice as to which category of contract language to use, but that one will work better than any other.
I encountered an example of that today. Consider the following provisions:
Acme may terminate this agreement by giving Widgetco notice of termination. Any such notice will be effective upon receipt unless it provides otherwise. [Language of discretion]
This agreement will terminate upon Acme’s giving Widgetco notice of termination. [Language of policy]
These provisions mean the same thing; I prefer the first. Language of policy is used for stuff that happens automatically. In this case, action by Acme looms large, so language of discretion seems more apt. And the language of discretion would allow Acme to specify that the agreement terminates at some time other than the moment of receipt.
For another blog post about choosing among categories of contract language, click here.