You might recall that last year in this post I suggested the possibility of using “language of concurrence” if when someone sells something the purchase price is being paid at the time the contract is being signed. Last month I revisited that idea in this post.
Well, I just realized there’s a traditional-language equivalent. Here’s an example:
In consideration of ten dollars in hand paid, receipt of which is hereby acknowledged, this offer shall remain open for 30 days.
But I’m not about to endorse this approach. For one thing, in hand paid is too olde-worlde. But use of this formula suggested that it was appropriate for me to keep looking for an alternative to expressing concurrent payment using language of obligation.
So how about this:
Acme hereby purchases the Equipment from Widgetco for the Purchase Price. Acme has paid the Purchase Price to Widgetco concurrently with the parties’ signing this agreement, and Widgetco acknowledges having received the Purchase Price.
It avoids the main problem readers had with language of concurrence, which is that it lacked finality.
What do you think?
Updated 15 November 2015, with further updates 19 November to change “the Purchase Price” to *$10,000″:
OK, after extracting nuggets of wisdom from A. Wright Burke’s scurrilous screeds :-) , here’s a revised version:
Acme hereby purchases the Equipment from Widgetco for $10,000, which Widgetco acknowledges having received from Acme concurrently with the parties’ signing this agreement.
Now, A. Wright Burke might object that if Widgetco says that it has received the $10,000, then that means it isn’t receiving it concurrently with signing. That’s correct, but my version reflects two practical considerations: First, I don’t want to suggest that payment occurred earlier in a separate step: that doesn’t accurately reflect the process of my shoving across the conference-room table, as the parties are signing the contract, a Halliburton briefcase stuffed with wads of $100 bills. And second, I think that saying instead is receiving would be too open ended for some in Acme’s position: they don’t want Widgetco to be able to come back later and say, “We were in the process of receiving the money, but then something happened!”
16 thoughts on “Updated: Further Thoughts on Making Sale and Payment Concurrent”
If it’s all happening at once, you might want to ditch past tense words: Acme *has paid* [read: is paying] the Purchase Price to Widgetco concurrently with signing this agreement, and Widgetco acknowledges *having received* [read: receiving] the Purchase Price.
If you don’t damn nominalizations, you could say: Acme is paying the Purchase Price to Widgetco at the signing of this agreement and Widgetco acknowledges receipt of the Purchase Price.
Either way, I dislike the acknowledgment as redundant. Never forget the lead-in: The parties agree to the following. It’s the unrepeated preface to every sentence in the contract. So why should the parties not content themselves with saying: [The parties agree that] Acme is paying the Purchase Price at the signing of this agreement?
At the risk of waxing ‘eccentric’ again, I point out that ‘Acme is paying the Purchase Price’ is what I call a ‘naked statement of fact’ and (horrors!) lacks a declarant and a declaring verb.
For the sake of consistency, shouldn’t *a certain somebody* be agitating for ‘Acme asserts that it is paying the Purchase Price at the signing of this agreement’?
Hmm. Maybe there’s life in language of concurrence after all! Perhaps the continuous present for paying is OK if it’s paired with the continuous present for acknowledging.
You gotta have the seller acknowledge having received the purchase price. You’re confusing language of agreement and language of declaration.
Language of concurrence ain’t language of declaration. No eccentricity here!
Angels and ministers of grace preserve us! Stay loose here, and don’t let the cement dry too soon!
1/ A contract takes effect at a point in time, the instant that all parties have signed it.
2/ With that thought firmly in mind, let’s look at the language you like:
Acme hereby purchases [at signing] the Equipment from Widgetco for the Purchase Price. Acme *has paid* [before signing] the Purchase Price to Widgetco *concurrently with the signing* of this agreement, and Widgetco acknowledges [at signing] having received the Purchase Price [before signing].
3/ The same payment can’t occur before signing and at signing, but your favoured language says it does. Pick a consistent scenario, either simultaneous or sequential:
(a) The first sentence envisions simultaneity: ‘Acme hereby purchases [at signing] the Equipment from Widgetco for the Purchase Price’; or
(b) The second sentence envisions a sequence like this:
(i) before signing, Acme gave Widgetco a sum of money that at signing and not sooner assumes the name Purchase Price;
(ii) at signing, title to the Equipment passes from Widgetco to Acme and Widgetco gets the right to keep the sum now known as the Purchase Price.
4/ Next problem: internal redundancy of the second sentence. If the contract states the ‘naked’ fact that Acme has paid the Purchase Price to Widgetco, that *means* that Widgetco has received the Purchase Price. What else can it mean? So it’s redundant for Widgetco to re-declare receipt in acknowledgment form. You reply that I’m ‘confusing language of agreement and language of declaration’.
5/ Two responses:
(a) If two statements are redundant, the fact that ‘you gotta have’ the second doesn’t make them not redundant. One has to go; if not the second, then the first. Result here of taking out the first and leaving in the second: ‘Acme hereby purchases the Equipment from Widgetco for the Purchase Price. Widgetco acknowledges having received the Purchase Price from Acme’. Any loss?
(b) That two statements belong to different categories of contract language doesn’t make them not redundant. ‘Acme has paid Widgetco and Widgetco acknowledges that Acme has paid Widgetco’ is redundant and one or the other should go.
6/ More generally, it seems to me that by virtue of a lead-in, naked statements of fact in the body *function* as joint statements of fact, much as in recitals. This would cover the words ‘Acme has paid the purchase price to Widgetco’: its a joint statement of past fact. If you don’t like the invocation of the lead-in, then let them be joint statements of fact by virtue of their context in a signed agreement of the parties. If the parties aren’t stating these facts, who is?
7/ I don’t think the contention that naked statements of fact are joint involves category confusion. It’s a separate conversation to what category naked statements of fact belong.
8/ The root of the redundancy temptation in this context is the fallacy of treating one thing as if it were two. A sale is a purchase seen from seller’s point of view. A purchase is a sale seen from buyer’s point of view. It’s only one event and needn’t be described twice. Similarly with payment and receipt.
9/ So when Acme ‘pays’ Widgetco, Widgetco ‘receives payment’ from Acme. It’s only one event and needn’t be stated twice.
10/ I should quit while I’m ahead, but I must have salmon genes. I further contend that the second sentence, in addition to being internally redundant, is redundant of the first sentence and should be omitted as clutter. The first sentence is, ‘Acme hereby purchases the Equipment from Widgetco for the Purchase Price’. That language — alone — accomplishes three things:
(a) transfers title to the Equipment from Widgetco to Acme;
(b) transfers title to the Purchase Price from Acme to Widgetco; and
(c) makes it hard for either party to deny that those two transfers happened.
Ken, stop squeezing that stress ball. And congratulations on the start of your newsletter.
Sorry for my being slow to digest this.
I don’t understand your point 3.
I agree, darn you, that it’s redundant to refer to both payment and receipt, for the same reason that it’s redundant to refer to both purchase and sale.
“For the Purchase Price” establishes what the price is. It doesn’t establish payment.
And No. Naked. Facts!
I’ve supplemented this post accordingly.
Point 3 rested on the assumption that ‘concurrently’ means ‘simultaneously’, which you have subsequently denied. My dictionary misled me.
I submit that ‘for’ is a powerful word, and in the sentence ‘Acme hereby purchases the Equipment from Widgetco for the Purchase Price’ the word ‘for’ makes the sentence mean ‘Acme takes from Widgetco and Widgetco gives to Acme, title to the Equipment in exchange for Acme’s giving to Widgetco and Widgetco’s receiving from Acme the Purchase Price’.
This is necessarily so because ‘Acme hereby purchases’ means the same as ‘Widgetco hereby sells’, since a sale and a purchase are not two things, but one thing seen from two points of view.
Saying that either a sale or a purchase is taking place requires that the parties are simultaneously exchanging considerations at the very point in time when the contract comes into existence, a point you generally refer to as ‘signing’.
I can’t see the circumstances in which this wording would be helpful. I don’t think it’s being overly fussy to say that handing over a cheque at singing does not constitute payment. If the cheque bounces, then this wording leaves the seller as having acknowledged a payment that was never in fact made (yikes!). Far better to stick with the ‘buyer shall pay’. If the buyer hands over a good cheque at signing then so much the better.
But isn’t the possibility of a bad check a separate issue? What if it’s a banker’s check? Or cash? And check my response to A. Wright Burke’s comment.
Yes, your wording seems great if the buyer is paying in cash (or a cash equivalent).
It works whatever the form of payment, if the sale is accomplished using language of performance. To address concern about a bad check, the fix isn’t turning payment into an obligation, it’s turning both sale and payment into an obligation.
The Acme-WidgetCo example is clearly a bill of sale, but is it a contract?
I leave to others the question of whether a bill of sale is a kind of contract. As a matter of semantics, I suggest that it is: a bill of sale features a category of contract language, namely language of performance.
And more broadly, I imagine the featured two sentences occurring in a contract containing statements of fact, dispute-resolution provisions, and other contract stuff.
True — which would raise contract-formation questions if in fact the sale transaction had already been consummated when the document was signed. It’d make for a nice law-school exam question (a subject on my mind — I spent part of the morning writing this semester’s final exam).
The sale doesn’t happen until the contract has been signed. The fact that I’ve shoved a Halliburton case crammed with packets of $100 bills across the conference-room table before signing the contract doesn’t change that.
I like the idea, but think it could be stated more succinctly: In signing this agreement, Acme purchases the Equipment from Widgetco, at the Purchase Price. WIdgetco acknowledges, concurrent with the signing of this agreement, that payment of the Purchase Price has been made by Acme.
For succinctness, how’s 17 words?
*Widgetco hereby gives Acme title to the Equipment and acknowledges receipt of the Purchase Price from Acme.*
The last two words are necessary only if the source of the payment matters.