Remember my post about abrogate? Well, now we have the second in my 46-post –gate series, derogate! (I’m joking—I hadn’t planned to explore two –gate words in quick succession. But as we’ll see, the two words are linked.)
Derogate has two meanings. When used as a transitive verb (in other words, if it makes sense only if it exerts its action on an object), it means “to cause to seem inferior, to disparage.” When used as an intransitive verb (in other words, if it makes sense if it exerts its action without an object), it means “to take away a part so as to impair, to detract.”
I’ve never used derogate in speech or in writing. And using an obscure word with two very different meanings depending on whether it’s transitive or intransitive seems like a really bad idea. So if you use derogate, you need your lexicon recalibrated—never use derogate in a contract.
Furthermore, as we’ll see, use of derogate is often a symptom of a broader confusion—you see it in provisions that don’t make sense.
Now, on to Edgar!
Here’s an example of the transitive use:
Licensor refusal to approve any Copy or Packaging shall be deemed reasonable in the case of any materials containing or referring to the Licensed Trademarks that in Licensor ’s opinion are likely to derogate, erode or tarnish the Licensed Trademarks , or otherwise diminish the value of the Licensed Trademarks.
I suspect that what the drafter was aiming for here was not the idea of saying nasty things about the trademarks, but instead using them in a way that would harm how they’re perceived. I leave the nuances to you trademark people.
Executive agrees and covenants that he or she will not in any way do or say anything at any time which disparages or derogates the Employer , its business interests or reputation, or any of its individual directors, officers, Executives , or agents.
If you have disparages, why add derogates? (And why use disparages anyway; see this blog post about that.)
When you use derogate intransivitely, use say derogate from. Here’s an example:
The aforesaid shall not derogate from the right of the Lessee to conduct a proceeding with the said authority for the purpose of appealing its arguments.
I’d say instead except that the Lessee may …
And what about limit or otherwise derogate from? An example:
This Agreement … shall not be so construed as to limit or otherwise derogate from any of the rights or remedies of Lender …
What effect other than limiting did the drafter have in mind? I have no idea. And anyway, I wouldn’t count on a court paying attention to this provision. (Go here for my article about trying to preempt court discretion.)
Another example, an internal rule of interpretation:
“written” or “in writing” is used for emphasis in certain circumstances, but that shall not derogate from the general application of the notice requirements set forth in Section 16 in those and other circumstances; …
Leaving aside whether this is a good idea—I’ll deal with that in another post—why not say does not limit or does not affect?
Then there’s this:
… it being understood and agreed that Section 5.01(p) shall in no event derogate or diminish the obligations of the Loan Parties to pay fees and expenses of the Administrative Agent and its Affiliates to the extent incurred after the Closing Date
Oops. They meant to use derogate intransitively, so they should have used derogate from. That’s what happens when you use an obscure word with two very different meanings depending on whether it’s used transitively or intransitively.
Consider this, from Wikipedia:
Derogation is the partial suppression of a law, as opposed to abrogation—total abolition of a law by explicit repeal—and obrogation—the partial or total modification or repeal of a law by the imposition of a later and contrary one. The term is used in canon law, civil law, and common law. It is sometimes used, loosely, to mean abrogation, as in the legal maxim: Lex posterior derogat priori, i.e. a subsequent law imparts the abolition of a previous one.
If any of this is relevant to you, that’s great. Me, I don’t give a hoot. In contracts, I say what I want to say as clearly and as concisely as a I can, moth-eaten tradition be damned. I have no more use for derogation in contracts than I do obrogation.
A sign that derogate has lost whatever significance it had is that it doesn’t even merit an entry in Black’s Law Dictionary.