Table 2 in MSDC chapter 3 displays an assortment of suboptimal ways to impose an obligation on a contract party that’s the subject of a sentence. I use shall, of course (as I explain in this article); the suboptimal variants include agrees to, undertakes to, and commits to. Well, I’m happy to announce that I’ve discovered another suboptimal variant, is bound to (and … Read More
I’ve written plenty about at its sole discretion over the years. The full discussion is at MSCD 3.168–96, but there’s also this 2011 article about a relevant California court opinion. Well, today I encountered the following in a contract: If the Company in its sole discretion agrees to such change, the Company shall … Previously I’ve written about at its sole … Read More
OK, so we now all know that the phrase represents and warrants is pointless and confusing. My recent article on the subject (here) establishes as much in excruciating detail. But I don’t recommend that you ask that the lawyers on the other side of a deal replace represents and warrants with states. The benefit of doing so would be more than outweighed … Read More
Over the years I’ve compiled the many confusing and wordy ways drafters have found to say may. Here’s another one: will be given the opportunity to (and its variant will have the opportunity to). Here are some examples from the great coal-ash pond that is the SEC’s EDGAR system: Each Tag Along holder will be given the opportunity to exercise their vested Options … Read More
I noticed this post on Keith Bishop’s California Corporate and Securities Law blog, on the meaning of the verb “permits” in a proposed change to the securities regulations. Here’s the relevant bit of Keith’s post: The verb “permit” means to give assent to some action or event. This implies an affirmative action on the part of the registrant. Applying this … Read More
Yes, the phrase represents and warrants is a fixture in contracts. And it won’t disappear from the scene any time soon. But now that my article (this one) is out there, I can declare that represents and warrants is a zombie usage. And no, it’s not like one of those fast zombies. Fast zombies are badass. Instead, represents and warrants is like … Read More
Routine bits of contract clutter have the potential to create real problems. Baron Oursler, senior counsel at the transportation company FleetPride and one of the participants at last week’s “Drafting Clearer Contracts” seminar in Houston, told me about an amazing example of that. I now pass it on to you, dear reader. The Dispute It involves a dispute between UBS … Read More
It’s time for another installment of your favorite game, Which category of contract language? Here’s a cleaned-up version of something I just saw in a contract: The Consultant may rely on the accuracy and completeness of all information provided by the Client. I suggest that language of discretion doesn’t make sense. Without this provision, would the Client have a remedy if … Read More
Welcome to shall seek, yet another unhelpful alternative to saying that a party has to use reasonable efforts to accomplish something. With shall seek, you’re saying that someone has to try to do whatever it is, but you don’t provide a standard. In each of the following examples from EDGAR, I’d use instead reasonable efforts: When placing such orders, the … Read More
For the sheer heck of it, let’s look at how the verb promises is used in contracts. Here are two examples from EDGAR of promises that: Executive agrees and expressly promises that, during the Prohibited Period, Executive shall not directly or indirectly (i) recruit, solicit or induce any employee, consultant, or independent contractor of the Parent Company or any of its Subsidiaries … Read More
