Alternative Defined Terms

Let’s tour the universe of alternative defined terms.

Alternative Defined Terms for Party Names

In MSCD 2.40 I note that drafters sometimes give alternative defined terms for a party name (as in “Acme” or the “Company”). Doing so serves no purpose and inflicts on the reader the burden of remembering that Acme and the Company are one and the same.

Alternative Defined Terms Consisting of a Defined Term and Its Initialism

Another example of alternative defined terms consists of autonomous definitions where one defined term is paired with its initialism equivalent. (This could conceivably occur in integrated definitions too.) Here are a couple culled at random from the definition section of a maintenance agreement filed with the SEC:

“Customer Service Request” or “CSR” means a request for assistance issued by LifeWatch Support Organization to Seller.

“End-of-Life” or “EOL” means the point when Seller decides to discontinue a Product and its maintenance will remain for five (5) years whatever earliest.

The notion presumably is that whereas the longer defined term gives the reader more of a clue as to what the definition is, the initialism is more succinct for purposes of any provisions that need to refer to this concept a number of times.

It seems that one should applaud this attempt at concision, but as with alternative defined terms for party names, such alternative defined terms force the reader to remember that two defined terms convey the same meaning.

Instead, aim to use the longer defined term and drop the initialism, as initialisms can turn your prose into alphabet soup. But be flexible, because in some cases the concision offered by the initialism outweighs its nuisance value; in that case, keep the initialism and drop the longer defined term.

Alternative Defined Terms Consisting of the Singular and Plural Form of a Defined Term

Some drafters feel compelled to use the singular and plural form when they create a defined term. Here’s an example occurring in an autonomous definition (I haven’t cleaned it up):

“Note” or “Notes” shall mean a promissory note or notes, respectively, of the Borrower, executed and delivered under this Agreement.

And here’s an example occurring in an integrated definition:

The Company, RR4 Consulting, any affiliated, combined, consolidated or unitary group of which the Company is or was a member, and any Plans, as the case may be (each, a “Tax Affiliate” and, collectively, the “Tax Affiliates”), has (i) timely filed, or has had timely filed on its behalf …

It’s a pointless exercise to use both the singular and plural form when you create a defined term—if the reader can’t figure out that the plural form of a given defined term means more than one of whatever was defined, that reader couldn’t be expected to tie his or her own shoelaces, let alone read a contract.

So you shouldn’t need to use alternative defined terms. Ever.

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.

2 thoughts on “Alternative Defined Terms”

  1. I disagree with your initial comment:
    “In MSCD 2.40 I note that drafters sometimes give alternative defined terms for a party name (as in “Acme” or the “Company”). Doing so serves no purpose and inflicts on the reader the burden of remembering that Acme and the Company are one and the same.”

    There are at least two situations to use alternative defined terms – when you are drafting a form agreement to be used for multiple customers, and within an agreement, when the role of the party is more important than the name.

    In a form agreement like a software license or order form, I will know the name of my client, but the customer will be identified by filling in a field. Using the alternative name such as ‘Licensee” is necessary since the contract will not be customized for each transaction.

    Within an agreement, there may be clauses that are mutual in nature and the role of the party may change. For example, in a confidentiality clause, either party might be the disclosing party or the receiving party. Drafting the clause using the party’s name results in duplicate clauses mirroring each other to cover the transmission of information to each other.

  2. Randall: You misunderstand my point; I’m sorry if I was unclear. I certainly don’t have a problem with using a common noun as a defined term for a party name. Instead, the practice I find problematic is offering two different defined terms for one party name. Ken


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