[Updated 13 September 2016]
I recently picked up a useful tip from an unlikely source—one of my own webcasts.
Osgoode Professional Development has been running my “Drafting Clearer Contracts” webcasts for a Canadian audience, and I’ve been on hand at the end of each webcast to answer any questions. I joined a bit early the webcast on categories of contract language, and as a result I was reminded of a usage that I had remarked on in the webcast but never followed up on—need not. Here are my thoughts on need not.
Colloquially, need is used to indicate not only the lack of something (I need a haircut) but also an obligation (You need to come to my office immediately).
It would be counterproductive to use need in a contract to express an obligation, as that function is already served, in the MSCD scheme of things, by shall for purposes of imposing an obligation on the subject of the sentence (Acme shall purchase the Shares).
Thankfully, I have yet to see need used to convey an obligation. But as I noted in the webcast, you do see need not and the variant no [noun] need. You’d be better off using something else.
When the subject of a phrase using need not is one of the parties, it may well be that a suitable replacement would be is not required to, so as to indicate the absence of an obligation:
Except as otherwise required under this Agreement or by applicable law, (a) Borrower agrees that Lender need not [read Lender is not required to] tell Borrower about any action or inaction Lender takes in connection with this Agreement;
Why favor is not required to? Because I find need not a little old-fashioned and a little foppish—it sticks out its pinkie when it’s drinking tea.
(In MSCD I recommend using is not required to in this context. I once contemplated using instead is not obligated to, but that would meet with resistance from English drafters, who would be inclined to used obliged instead.)
Sometimes need not is used to reinforce that may conveys discretion. That use of need not is redundant:
Advances under this credit facility, as well as directions for payment from Borrower’s accounts, may be requested orally or in writing by authorized persons. Lender may
, but need not,require that all oral requests be confirmed in writing.
Furthermore, even if the subject is a party, it doesn’t always follow that need not is used to indicate lack of any obligation. Instead, need not can be used to convey that a given action doesn’t constitute a condition:
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.
However, no notice need be provided to any person who, after Event of Default occurs, enters into and authenticates an agreement waiving that person’s right to notification of sale.
In such cases, what you should use instead of need to depends on the context. In the first of the two examples above, I’d delete it, as the it being understood phrase states the obvious.
If need not is used with a thing rather than a person, it would be awkward to use instead is not required to be, as you’re not negating a duty. And may not wouldn’t work either, as that could be misunderstood as language of prohibition. Your best bet might be to rephrase the provision to state what is permissible as opposed to what isn’t mandatory:
The provisions of the various Stock Option Agreements entered into under the Plan need not be identical [read may vary].
Bonus Stock Awards … need not be subject to [read may omit provisions relating to] Performance Measures or to forfeiture.
The provisions of separate Options need not be identical [read may differ], but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions: …
[Update: But as I noted in a reply to Chris Lemens in the comments, I’m leery of using may with a thing as the subject. That’s something I’ll be exploring in a future blog post.]
Thus endeth the sermon on need not.
Ken:
The only part of this blog post with which I agree is that one ought not to use “need not” to negate both an obligation and a condition in the same agreement. Need not is short and not really ambiguous on its own. “Need not” is thus a particularly nice way to carve out exceptions from a condition, especially when using “must” to express the condition. For example: “For a communication to be a valid notice under this agreement, the communicaiton must [X] abd [Y] but need not [Z].” And attempting to restate the negative into the positive (using may) will often open up additional issues for negotiation when all you really need is to negate one situation. Making that a firm recommendation in the next edition of MCSD would mean recommending language that is highly suboptimal from a negotiating standpoint.
Chris
Chris: As regards not using need not when what you mean is is not obligated/required to, I’m sticking to my guns!
I’m open to how in your example you use need not to limit the scope of a condition. But your example is a lot clearer than the examples I include, which are so drawn out that it’s not clear what the function of need not is.
On their face, the examples I provide for using may have no bearing on limiting a condition, so I think that change is benign.
And are you in favor of using need not to redundantly reinforce language of discretion?
So I think you might have overstated the extent to which you disagree with what I say in this post.
Ken
Chris: As regards not using need not when what you mean is is not obligated/required to, I’m sticking to my guns!
I’m open to how in your example you use need not to limit the scope of a condition. But your example is a lot clearer than the examples I include, which are so drawn out that it’s not clear what the function of need not is.
On their face, the examples I provide for using may have no bearing on limiting a condition, so I think that change is benign.
And are you in favor of using need not to redundantly reinforce language of discretion?
So I think you might have overstated the extent to which you disagree with what I say in this post.
Ken
Ken:
Maybe so. I like “need not.” It is elegant and short, which is often a hallmark of good drafting. I don’t necessarily disagree with you on using “need not” for obligations. I would just use “need not” for either duties or conditions, but not both. I think it is more useful for conditions, so would reserve it for that context and use something else for duties. Since I don;t have anything else handy, I’d use whatever you recommended in the most current verison of MCSD.
I would repeatedly use redundancy over and over again ad nauseam if I needed to reinforce that I won a point in negotiation where I anticipate conflicts during performance over that point. There is usually some reason for specifically calling out a negative.
Let’s take this one as an example: “The provisions of separate Options need not be identical.” You suggest “may vary” instead of “need not be identical.”
First, “need not be identical” carries a lot more plain-English sense to me than “may vary.” A business person reading the first will understand it; they will cock an eyebrow about the second.
Second, there may be a reason why the drafter chose to negate identity specifically. There may be a requirement or presumption in law or in articles of incorporation that the grants must be identical unless the board adopts a plan that says the contrary. Yes, it is magic wordery, but cases sometimes turn on using the right magic word.
Chris
Chris: My abstract-noun-plus-may examples raise a bigger issue: I’m undecided about according discretion to a thing rather than a person. I suspect that I wouldn’t have drafted those examples using either need not or may. Ken
The problem with “obligated”, from a British perspective, is that the word barely exists here except in legal contexts. We use “obliged” to mean the same thing, and “obligated” is often assumed to be a clumsy back-formation. I could of course use “obliged” instead, and many do, but my understanding is that this seems odd to American readers (who frequently have the pleasure of reading my contracts), so I try to avoid that too.
All of this is unfortunate, as I agree that obliged/obligated is otherwise the best word for a negative obligation.
I’m afraid I would just say “is not required”. There is a hint of elegant variation about it, though being consistent with the phrase in the document makes this barely perceptible, and I think this is the lesser evil for my purposes.
“Need not” seems slightly conversational to me – “does not need to” would seem more stylistically harmonious with legal drafting, but neither quite seem to evoke the legal nature of the obligation.
W: Thanks for the reminder about oblige. I discussed it in this AdamsDrafting post. Yes, obliged would strike American ears as being too foppishly conversational: “Much obliged, old chap.”
And thanks for your point about does not need to. It helps highlight the issue.
Ken
Excellent – obligated versus obliged in US/UK negotiations is one I recognise too, and I agree with your comments.