“Herein” (And I Need a Label for This Kind of Ambiguity)

I’ve previously entertained you with court opinions addressing confusion over what part of a contract is being referred to in a contract provision. Who can forget the confusion over a “hereunder”? (See this post). Or over “except as provided below”? (See this post.)

Well, I have another treat for you. (Yes, I know, I’m too generous.)

The case is Bayerische Landesbank, New York Branch v. Aladdin Capital Mgmt. LLC, 692 F.3d 42 (2d Cir. 2012) (PDF here). (I learned about it from this Paul Hastings newsletter.) This time, it’s “herein” that created the problem. It occurs in section 29 of the contract in question (emphasis added):

This Agreement is made solely for the benefit of the Issuers and the Portfolio Manager, their successors and assigns, and no other person shall have any right, benefit or interest under or because of this Agreement, except as otherwise specifically provided herein. The Swap Counterparty shall be an intended third party beneficiary of this Agreement.

I’ll spare you the context. All that matters is that the court reversed, holding as follows:

The “herein” in “except as otherwise specifically provided herein” is not defined. While it might be read to refer, as Aladdin argues, to only section 29, it could just as reasonably be read to refer, as Bayerische argues, to the [contract] as a whole.

So I think that by now we’ve gotten the message: Don’t use hereinhereunder, and other here– and there– words. Not only are they archaic, they create confusion. (The one exception is hereby used in language of performance, as in Acme hereby grants the license to Smith.) And when referring to parts of a contract, don’t use just above or below.

While I’m at it, allow me to adjust my ambiguity taxonomy. I’ve previously grouped this kind of ambiguity with what I call antecedent ambiguity—the ambiguity that arises when in a contract you point to something else in the contract and it’s not clear what you’re pointing to. (Go here for an example.) Well, that’s different from this kind of ambiguity.

And that means I have to find another name for this kind of ambiguity. I await your suggestions.

[Updated February 8, 2014: OK, how about “contract-reference ambiguity”?]

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.

14 thoughts on ““Herein” (And I Need a Label for This Kind of Ambiguity)”

  1. Similar to your Feb 8th suggestion: cross-reference ambiguity

    A fantasy evil scenario just played out in my mind where, when using Word’s cross-reference feature, instead of inserting a section number Word simply inserted “herein”.

    • Are you referring to the no-third-party-beneficiary provision at issue in the litigation? The short answer is yes, in the right context. But this isn’t the place for me to get into that in any detail, I’m afraid.

  2. Ken:

    Referent-scale ambiguity. You start with a reference to something. You are uncertain what the referent includes. It clearly does include the specific spot where the contract made the reference — “herein” always includes the very sentence in which “herein” appears. But it is unclear what the referent includes beyond the specific point in the contract. It could include the paragraph, the section, the article, the document in a multi-document deal, or the entire arrangement. What is ambiguous about the reference is the scale of the referent. On the plus side, this can work for pointing words with similar problems, such as “therein” and “thereunder.” But those words are much more usually preceded by something that resolves the referent-scale ambiguity.

    So, an alternative that does not work for “therein” is self-reference ambiguity. I like this a little less, but it makes sense for mostly the reasons above. It is similar to the ambiguity that could ensue when I refer to myself as “we” meaning the company or family I represent, depending on the context.

    I don’t like “contract-reference” because it implied to me that the usual intent was to refer to the entire contract.

    I don’t like “cross-reference” because the language is not pointing at something else. It is pointing at itself and maybe some other stuff that includes it.


  3. Why not “reference ambiguity” or “referent ambiguity”? Where’s the need to specify that the ambiguity is internal to the contract?

    • Yes – or “referential ambiguity”, if you want an adjective.
      Any of these would encompass therein/thereunder etc. in relation to a document outside of the contract. “A breach of any provision of Part V of the Financial Services and Markets Act, or any subordinate legislation thereunder”. That seems the same kind of ambiguity, so the expression probably doesn’t have to refer to the contract.


Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.