Regular readers will know that the foundation of controlled drafting is how you use verb structures. I address that in my “categories of contract language” framework. (See this post for my quick-reference chart on the subject.)
One of the more crowded categories-of-contract-language topics is when the obligation is imposed on someone other than the subject of the sentence. Well, it’s now going to get even more crowded. After rooting around for 23 years, I will now address for the first time two new variants for imposing an obligation on someone other than the subject of the sentence! Such are the seemingly endless nuances of this subject. (Or maybe I’m just slow!)
Here’s one new variant: Acme requires Widgetco to submit the following documents (instead of Widgetco shall submit). I spotted it a few days ago. It’s not referring to an obligation stated elsewhere. Instead, the drafter is using this structure to impose an obligation. Acme is the subject of the sentence, but the obligation is imposed on Widgetco.
But wait, there’s more! Another new variant was inspired by last year’s post on this agreement allows. If some drafters use this agreement allows (or permits) to express discretion, I knew it had to be the case that some drafters would use this agreement requires to impose an obligation. So today I let my truffle-hunting pig loose on Edgar, and this is what she found (emphasis added):
Except as it otherwise provides, this Agreement is intended to apply to the resolution of disputes that otherwise would be resolved in a court of law, and therefore this agreement requires all such disputes to be resolved only by an arbitrator through final and binding arbitration and not by way of court or jury trial.
It’s commonplace for this agreement requires to be used to refer to an obligation stated elsewhere in a contract, as in Whenever this agreement requires a Subsidiary of any of the MPLX Parties to take any action. But that’s not what’s happening in the above example. Instead, the drafter is trying to impose an obligation.
What these two examples share is that they treat obligations not as something that inherent in a verb structure, which is the case when you say Acme shall purchase the Shares. Instead, obligations require agency: they have to be imposed by something.
Clearly, the rational response to that notion is, No thanks! It complicates matters, and it’s ambiguous, as it suggests to the sensible reader than you’re referring to an obligation stated elsewhere.
But where would we be without the fun of suboptimal verb structures? Look for these variants in the fifth edition of MSCD.
2 thoughts on “New Variants of Language of Obligation!”
What these impassive structures neglect is that at the beginning of nearly every contract is the lead-in “the parties agree as follows.” If you think of that expression as beginning every term of the contract, you’d come up with “the parties agree that this agreement requires…” Well, duh.
The only reason a party has a contract obligation is that the obliged party has taken the obligation on itself by signing the contract.
The *other party* doesn’t impose the obligation on the obliged party.
The *contract* doesn’t impose the obligation on the obliged party.
Oh, drafters speak informally as if parties impose duties on each other, or as if contracts impose duties on parties. That’s harmless shorthand unless it fogs the underlying fact that contracting parties have no contract duties they don’t take upon themselves by signing.
The disciplined use of ‘shall’ requires (a) using ‘shall’ to mean ‘take(s) on a duty to’ and for no other purpose, and (b) expressing a party’s assumption of a duty by no formulation other than ‘shall’.
That rule of ‘shall’ functions like a defined term. It bans other ways of expressing the same idea, whatever virtues or vices those other ways may have, lest a variant formulation be misunderstood to signify a variant meaning.
Variant formulations may have *other* flaws (eg the formula ‘this agreement requires/permits’ is anthropomorphic), but their basic, fatal underlying flaw is that they violate the best practice of using only ‘shall’ to mean ‘takes on a duty to’.
That flaw afflicts ‘will’, ‘must’, ‘is obligated to’, ‘is required to’, ‘Acme requires’, and ‘this agreement requires’ and all the rest.
The same flaw afflicts even the formulation ‘takes on a duty to’, which cannot be otherwise criticized, since it states exactly the meaning of ‘shall’ in the MSCD sense.
In my (MSCD-heretical) view, making ‘shall’ a defined term is a good idea: ‘In this agreement, “shall” means “hereby takes on a duty to”‘.
My reason for the second MSCD heresy of including ‘hereby’ is that I see the taking on of a duty as a performative, an action completed by uttering the words, as in ‘I promise’.
Using ‘hereby’ in the definition of ‘shall’ rules out any notion that ‘takes on a duty to’ is an observation rather than a performative.
I’m now going behind a tree where Ken’s darts can’t hit me. –Wright