25+ years into this contract-language racket, I asked myself, What’s up with intends to? I intend to answer that question in this post.
Let’s start with an example of intends to:
PetVivo intends to utilize any proceeds from this offering promptly upon receipt from investors, regardless of the actual number of Units that are sold in this offering.
A New Category of Contract Language?
The phrase intends to expresses a state of mind. That raises the question whether saying Acme intends to is a statement of fact. It’s not language of performance: Unlike Acme hereby grants, the intention exists independently of the utterance. But the utterance announces the intention and makes it new again, much as saying I love you announces the love and makes it new again. So it would be clumsy to insist that outside of recitals, Acme intends to must be treated as a statement of fact and so phrased as language of declaration, by saying Acme states that Acme intends that.
The implication of what I just said is that I might need a new category of contract language—language of state of mind. Ay caramba! I’ll have to think this over.
Making a Commitment
Saying Acme wants to expresses a desire. Saying Acme intends to expresses a commitment. Contracts are all about commitment, so Acme intends to is fine, isn’t it?
No, it isn’t fine. The level of commitment it suggests is unspecified. It might reflect a passing whim, or it might be backed up by months of planning. That lack of specificity could cause confusion, even fights.
So I recommend you either use Acme wants to (but only in a recital) or you detail, in a statement of fact, exactly what kind of commitment Acme is making.
Absence of Intention
What about expressing absence of intention? Here a strange example of that:
Neither the Issuer nor Finance NomCo intends to hinder, delay or defraud its creditors by or through the execution and delivery of, or performance of its obligations under, this Indenture, the Notes or the other Basic Documents to which it is a party.
I propose that if a party to a contract cares about the other party not doing something, instead of having the other party say it doesn’t intend to do that thing, it would be preferable to prohibit the other party from doing that thing or use a liability-assigning mechanism—indemnification is an obvious option—to make the other party liable for consequences of its doing that thing.
Using “Intends To” in Recitals
You see intends to in recitals. MSCD § 2.147 recommends you not use intends to in recitals, “as it suggests a plan outside of the contract.” In purpose recitals, use instead wants. If you’re referring to a commitment outside the contract, be specific.
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Soon, the other shoe will drop, in the form of a post on intends that.
I take it you’re distinguishing “intends to” from “intends that,” a formula you have blessed for statements made by parties who want to influence how a contract is interpreted by a court, without declaring the “that” by fiat, which you have correctly pointed out is a no-no when it’s the court’s call.
Hi Vance. The context for “language of intention” is a little different from that. As I note in the final line of the “intends to” post, I’ll be following up by looking broadly at “intends that”.
When this weaker language pops up, I see it as one of two things: first, the party is unwilling to bear an obligation to do that thing (rightly or wrongly), or second, there’s some bit of hand-waving going on around entering into the contract in good faith or being worried about being taken for a ride.
Example: I buy your company and want to hire you for five years. I can’t force you to work, and you tell me that you’re willing to work for 5 years. Using “Adams intends to remain employed for 5 years” is, IMHO, a method of turning your statement into something that is intended to serve as a representation so that if you quit 30 days after closing, and I discover the emails to your friends about how you’ve already bought your plane tickets for 31 days out, I can sue you for the misrepresentation and perhaps fraud.
My response is that this kind of thing doesn’t really belong in a deal document, and not really in an employment agreement either. It’s my job to structure an offer for you that creates the necessary incentives to keep you at your desk. (I might create a deferred bonus worth what a recruiting effort to replace you would cost and agree to pay it to you at the end of year 5, for example.)
The “intends” language is there to get a representation of the intangible fact of what is in your plan today, recognizing that it might change.