CONTRACT-DRAFTING NOIR (Episode 338) Man sitting in a nondescript motel room at night. Bright lamp illuminates him but leaves his face in shadow, as does his fedora. His voice is as world-weary as his slouch. It’s real simple, see: Use the passive voice, drop the actor, bad stuff happens. Today’s cautionary tale comes from another […]
“Now” in Language of Performance
OK, kids, this is my most novel categories-of-contract-language post in a while. Let’s start with hereby. Here’s what MSCD ¶ 3.35 says: One helpful element of language of performance is hereby, which signals that the act described is being accomplished by the speech act itself. You could omit hereby, as in [1-1a], but this use […]
Double Throat-Clearing!
One of my favorite categories-of-contract-language topics is what I call “throat clearing.” That’s when you have an extraneous verb structure bolted to the front end of a sentence. I haven’t discussed throat-clearing much on this blog, so here’s the first section of MSCD‘s treatment of the subject: I mention this because of an exchange I […]
Another One for the Scrapheap: “Stipulates That”
Use stipulates that in a contract? No thanks. Sometimes it’s used in language of declaration, instead of acknowledges: Borrower acknowledges and stipulates that the Loan Agreement and the other Loan Documents executed by Borrower are legal, valid and binding obligations of Borrower that are enforceable against Borrower in accordance with the terms thereof … . In […]
The Subjunctive? In Contracts?
Consider the following: If the Borrower [be] [is] in default, … It is a condition to closing that the Buyer [have] [has] received an opinion of Acme’s counsel … . If Acme requires that Widgetco [pay] [pays] the purchase price in zlotys … The Company recommends that the Employee [retain] [retains] a lawyer … In each example, […]
“At Liberty To”: Yet Another Suboptimal Way of Saying “May”
Longtime readers will be aware that I’m particularly fond of finding effed-up ways of saying may. The fourth edition of MSCD lists in table 4 more than a dozen wordier and less-clear ways of saying Acme may, but this post from earlier this year confirmed that that list wasn’t exhaustive. And today, thanks to my […]
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. […]
Grumpy Cat and the Distinction Between Obligations and Conditions
The case before us is Grumpy Cat Limited v. Grenade Beverage LLC, No. SACV152063DOCDFMX, 2018 WL 2448126 (C.D. Cal. May 31, 2018) (PDF here). It has something to tell us about how not to handle the distinction between conditions and obligations. A coffee shop signed a licensing agreement with the owners of Grumpy Cat. It used the […]
“Affirmative Covenants” and “Negative Covenants”?
From reader Zack Miller, of Sacramento, California: What are your thoughts on organizing credit agreements based on affirmative and negative covenants? (i.e., an article devoted to affirmative covenants and an article devoted to negative covenants). It makes sense to a lawyer, but is it really the best way to organize the various promises in a […]
The Published Version of the Quick Reference to the Categories of Contract Language
A year ago I published in this post the first draft of what I called a “quick reference” to the categories of contract language—a summary of the different categories, what they look like, what they’re used for, and where you can find more information. Go here for the version included in chapter 3 (The Categories of […]