I suggest that for purposes of contract drafting, you can always do without automatically.

Consider the following fragment:

… and each January 1 thereafter, this agreement will be automatically extended for one additional year unless not later than …

I suggest that eliminating the word automatically wouldn’t affect the meaning.

The same goes for automatically in the following fragment:

… and restrictions on any such awards will automatically lapse at midnight at the beginning of the Date of Termination …

Sometimes automatically is inappropriate because it suggests that something will happen, whereas in fact a legal fiction is being established. And legal fictions are best expressed using deem. (See MSCD 9.1.). Here’s an example:

If under U.S. federal income tax laws and regulations the Employee would be deemed to to have constructively received any right to payment or other benefit hereunder (making that payment or other benefit subject to income taxation) before the date that payment or benefit is payable hereunder, then (1) the distribution terms and your other rights to that payment or benefit will be automatically [insert will be deemed to have been] modified to conform to the tax law requirements to ensure that constructive receipt does not occure.

(I of course have no idea whether the original provision actually works as a matter of tax law.)

Sometimes automatically is used even though it seems that someone actually has to do something:

If and when Units vest in accordance with section 5, Shares in an amount equal to the number of vested Units will automatically be issued to the Participant on the Determination Date and will be evidenced by a stock certificate or a book entry account maintained by Shareholder Services.

Shouldn’t one say instead something like Acme shall cause X to issue promptly to the Participant … ?

Here’s a final example: In an Avis Budget Group, Inc. note indenture, the defined term Statutory Reserve Rate was defined by reference to “reserve percentages.” A couple of sentences after the definition came the following sentence: “The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in the reserve percentage.” Leaving aside the verb-use problems, I suggest that this sentence is redundanct: given the definition of Statutory Reserve Rate, any change in the reserve percentages necessarily results in a change in the Statutory Reserve Rate without any action on anyone’s part.

Anyone want to put in a good word for automatically?

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.

3 thoughts on ““Automatically””

  1. The only hesitation I have relates to your first example. If it were to say “… this agreement will be extended for one additional year…”, then the use of the passive raises the notion that it is an obligation on the parties to extend the agreement, but that the extension would not happen until effected by them. I know this is not the more natural of the two interpretations for a number of reasons, but cases have been argued on flimsier grounds than this, and staying out of court is the prime purpose of good drafting. Using “automatically” fixes it.

    My actual solution, though, would be to say “… this agreement will extend for one additional year…”. This makes it active, and therefore similar to the example regarding lapsing.


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