“Except as Provided Below”

In the dispute addressed in the recent opinion of the Second Circuit in In re Lehman Bros. Holdings (here), the following contract language was at issue:

Nothing in this Agreement shall create or be deemed to create any third party beneficiary rights in any Person or entity not a party to this Agreement except as provided below.

One of the litigants argued that the phrase “except as provided below” was ambiguous, in that it wasn’t clear whether it referred to the section in which that sentence occurred or to the contract as a whole.

As arguments go, that was pretty feeble. But why give a disgruntled contract party even a sliver of argument? Be specific in your cross references.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.