An Alternative Verb Structure for General Terms

There’s a specialized kind of business contract that I’ll call “general terms”—a document created by a company or other organization to describe how its system operates. A set of general terms might describe how Acme sells widgets to many different buyers, or it might describe a network, with different kinds of entities playing different roles. A set of general terms only has one counterparty at a time. It’s commonplace that a counterparty doesn’t actually sign a set of general terms; instead, the general terms are made part of some other document that the counterparty does sign.

General terms pose a challenge when it comes to verb structures, for two reasons.

A Company Imposing Obligations on Itself

First, it can seem counterintuitive, for purposes of Acme’s general terms for purchase of Acme widgets, to have Acme impose obligations on itself. That’s the case whether you, like me, use shall to impose obligations on the subject of the sentence, or whether you use must. That has given rise to the notion of using in your general terms will to impose obligations your company and must to impose obligations on the other party.

Although Bryan Garner endorses this practice (see this 2011 post), it’s truly bizarre to vary your verb structures depending on who the party is, using the nice will for yourself, the nasty must for the other guy. And using will to impose obligations on Acme paradoxically exploits the weakness of using will to express obligations—will appears unassertive because it’s also used in language of policy (as in The price will increase to $3 if …).

But despite its weaknesses, some opt for this convention—including someone at one of my consulting clients, as I learned in a conversation a couple of weeks ago. So evidently some do find challenging the idea of a company imposing obligations on itself.

Making Heavy Weather of What Is Routine

The second way that general terms make for awkward verb structures is that they can force you to make heavy weather of that which is routine.

That’s something I discuss in this post from earlier in 2018. To address Widgetco issuing invoices to Acme, you could use language of obligation, language of discretion, or language of policy, or you could use a condition (using language of obligation). But whatever your choice, it can seem clumsy, given that Widgetco issues invoices as a function of its business processes.

An Alternative

If you’re looking for a lighter touch in general terms, here’s an approach I just used for a client.

First step, you’re not using shall. No surprise there—shall is best kept for negotiated business contracts. Use must for obligations of the one or more other players.

Now here’s the novel part: for activities that are part of the business processes of the key player, use the simple present, to signal habitual activity. Here’s are two examples:

Acme permits Participants to inspect the record for Consortium transactions on a given day until three months after that day.

Acme initiates reimbursement five Business Days after the day it receives the Data File.

This approach has the advantage of making it clear that instead of being handled one at a time, the matters in question are part of a business process. But that constitutes the disadvantage of this approach too. It allows you to avoid assigning a given provision to a particular category of contract language, but if that provision ends up being a point of contention, you’ll be faced with the age-old question: what category of contract language should this be?

Drafters like it when general terms go down easy, so I expect that this approach will have some appeal. But you should be aware that it comes at a cost.

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.