[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.