Defined Terms

MSCD offers two ways to create defined terms: autonomous definitions and integrated definitions. Here’s an autonomous definition: “SEC” means the U.S. Securities and Exchange Commission. Here’s an integrated definition, with its associated defined-term parenthetical: … Acme Incorporated, a Delaware Corporation (“Acme”). But one also sees a different way of presenting definitions: as autonomous definitions, but with the defined term placed at the … Read More

I’ve long observed that the defined term Purchase Price is used two convey two meanings: First, the price at which something is to be sold, as in this example: Subject to the terms and conditions hereof, the Company hereby agrees to issue and sell an aggregate of one hundred nineteen thousand nine hundred forty (119,940) shares of the Preferred Stock … Read More

It’s a bad idea to use in contracts paired party-name defined terms that differ only in their final syllable: they force readers to work harder, and there’s always the risk that the drafter will by mistake use one defined term instead of the other. Today I asked people on Twitter to help me compile a list of such paired defined terms, and … Read More

Each of the following extracts from EDGAR exhibits the same problem: For purposes of this Agreement, “Eligible Plan Assets” mean total Plan Assets (including assets invested in American Funds and other mutual funds or investment options approved for use in PlanPremier), excluding … “Moral Rights” mean any rights to claim authorship of or credit on an Assigned Inventions … For purpose of … Read More

I know only too well that if you draft a contract of any length and complexity, keeping track of the defined terms can be a challenge. It’s easy to find yourself using terms you don’t define, defining terms you don’t use, and using different defined terms to convey the same meaning. Thanks to Cousin Joshua, I learned about Wells Fargo … Read More

I spotted an oddity in section 1(a) of the contract providing for Jeff Bezos’s purchase of the Washington Post. Observe where the defined-term parenthetical is positioned (italics added): To the extent not already owned by the Post Subsidiaries, the Transactions shall include the transfer to the Purchaser or the Post Subsidiaries of any other assets primarily related to the Post Business (other than … Read More

As one of their assignments, students taking my course at Notre Dame Law School drafted an employment agreement. Necessarily, I prepared one too. I based it on something I had drafted a few years ago, for a redrafting project at another school. My version used the defined term the Executive, as that was the defined term used in the contract that formed the basis … Read More

Warning: The following is for serious defined-term geeks only. MSCD 6.18 says, “Put any set of autonomous definitions in alphabetical order.” I’d like now to suggest an exception that could apply when two or more autonomous definitions are placed “on site” in their own subsection (as opposed to being placed with other autonomous definitions in a definition section). But at the … Read More

A New York appellate court recently unanimously affirmed a judgment of $17.2 million against the law firm Cadwalader, Wickersham & Taft in a legal malpractice action alleging that due to a drafting mistake by the law firm, its client had had to pay its investment advisor $10 million instead of $2 million in a dispute over fees earned in an acquisition. Red … Read More