Recently I encountered the word personnel in a contract. Hmm, how does personnel relate to employees? I asked my usual employment-law resources and they replied that personnel and employees mean the same thing, although personnel is perhaps the fancier option. But in my world, which I suspect is a narrower, more cramped, darker world than theirs, the sensible meaning attributed to words … Read More
The word workmanlike features in a lot of contracts on EDGAR, particularly loan agreements and landlord-tenant contracts. Here are three random examples: Borrower shall only use contractors … who generally have a good reputation for completing their work in a neat, prompt and workmanlike manner … All Tenant Improvements shall be done at Tenant’s full cost, expense and risk, shall comply … Read More
In MSCD, as well as in this 2007 post, I say that the phrase during the term of this agreement is usually redundant. I use the following example: During the term of this agreement, the [The] Company shall pay Jones an automobile expense allowance of $1,000 per month, grossed up for income tax purposes, and reimburse Jones for all gasoline … Read More
The other day I permitted myself the following japery on Twitter: Contemplating new "efforts" standard: premium effortssuperior effortsValhalla effortsgalactic effortsKal-El effortsEfforts McTryHard — Ken Adams (@AdamsDrafting) April 2, 2016 But that led me to search for efforts standards on steroids. Searches for the likes of major efforts uncovered nothing, unsurprisingly, but I got plenty of hits on EDGAR for one formulation—extraordinary … Read More
Apparently there’s no I in team. And there’s no objective and subjective in use and interpretation of efforts provisions. When I ask seminar participants to tell me the difference between best efforts and reasonable efforts, it’s routine for someone to suggest that the former represents an objective standard and the latter a subjective standard, or vice versa. That question is in … Read More
You’ve prepared a contract that imposes on Acme an obligation to use reasonable efforts to sell Widgets. If you leave it at that, a fight could arise at any time over whether Acme has used reasonable efforts. You could add to the deal by saying that you may terminate if Acme doesn’t reach stated sales targets. That would give you … Read More
So we know the following about efforts provisions: It makes sense to use efforts to express an obligation if the party under the obligation doesn’t have complete control over achieving the desired result. Contract parties also use efforts obligations as an expedient alternative to stating precisely what a party under an obligation has to do to achieve the desired result. … Read More
In this comment, longtime reader Vance Koven suggests using Acme shall seek to instead of Acme shall use reasonable efforts to. He says that they’re equivalent, in that any court would apply a reasonableness standard to an obligation stated using seek. I understand Vance’s point. In fact, I’m going to go further. Why use the somewhat dated and literary seek? … Read More
Note use of the Latinism prima facie in following provisions, which I extracted from EDGAR without anaesthesia: The Finnvera Facility Agent shall maintain in its books at the Finnvera Facility Agency Branch a record of the Term Loan attesting as to the total of the Borrower’s indebtedness to the Tranche A Lenders. These accounts or registers shall constitute, in the … Read More
Not enough people write about contract usages, so I’m pleased when a new article arrives on the scene, particularly when it’s written by someone other than me. But one sign of a mature marketplace of ideas is when commentators build on the work of others, instead of treating a given topic as if they’re the first to examine it. With that in … Read More
