Here’s another target in the battle against ponderous contract prose—the adjective applicable. I discuss below three different ways that it’s used in contracts.
“Applicable” Plus Noun
Sometimes applicable is used before a noun. It’s possible to use applicable appropriately in this manner:
The Company shall provide the Employee with pension and welfare benefits and group employee benefits such as sick leave, vacation, group disability, and health, life, and accident insurance and any similar indirect compensation from time to time offered generally to the Company’s executive personnel, subject in each case to the terms of the applicable benefit plan or program.
But often, as in the two examples that follow, applicable should be omitted, because it inappropriately suggests that the provision applies to a subset of a whole, whereas it in fact applies to the whole.
Recipient shall pay any
applicabletaxes incurred in connection with the Consultant’s performance of services under this agreement.
Conveyance of the Mortgage Notes and the Mortgages by the Company under this agreement is not subject to the bulk transfer laws of any
I’ve wrestled with using applicable in references to violation of, and compliance with, laws. In the following example, it would be a little odd to refer to any applicable law, as if Acme had perhaps violated some inapplicable laws.
Acme’s execution and delivery of this agreement and performance of its obligations under this agreement do not violate any
But what about the sentence Acme is in compliance with all applicable laws? I’m not quite as comfortable with deleting applicable, perhaps because you could conceivably elect to comply with a law that you’re not otherwise subject to. My preference would be to skirt that issue and rewrite the sentence to refer to Acme’s not violating any laws.
Even if a provision is referring to a subset of a whole, that can be a more succinct and precise alternative to the applicable. I’ve made that change in the following example, because each anniversary is being treated individually. I’m still uncertain which is the better choice; what do you think?
The Company shall pay the Employee a bonus of $33,000 not later than 30 days after each of the first three anniversaries of the Commencement Date, on condition that the Employee is employed by the Company on
the applicable[that] anniversary.
The Verb “To Be” Plus “Applicable”
Applicable is also used with the verb to be. Generally, you’d be better off using instead the verb apply—verbs good, adjectives and abstract nouns less good. (See MSCD 13.7.)
The provisions of this section 7.2 will
be applicable[apply] solely to work that the Tenant performs, or causes to be performed, before the Commencement Date.
Any such modification or revocation will be effective upon receipt by the Advisor of notice of that modification or revocation and will not
be applicable[apply] to investment transactions to which the Advisor has committed the Company before the date the Advisor receives that notice.
Any adjustment in the Applicable Margin will
be applicable[apply] to all Extensions of Credit then existing or subsequently made or issued.
The one use of applicable I can’t complain about is the phrase as applicable. It’s equivalent to, but a little more succinct than, the phrase as the case may be.
The terms of this warrant will apply to the shares of stock and other securities and property received on exercise of this warrant after consummation of that reorganization, consolidation, or merger or the effective date of dissolution following any such transfer, as applicable.