Redraft This Sentence, MSCD Style

This morning I encountered the following sentence on EDGAR:

Therefore, the obligations of the Sellers under this Agreement, including, without limitation, the Sellers’ obligation to sell the Shares to the Purchaser, shall be enforceable by a decree of specific performance issued by any court of competent jurisdiction, and appropriate injunctive relief may be applied for and granted in connection therewith.

It’s nothing special—I just happened to be searching for contracts using the phrase “special performance.” I haven’t looked closely at it; all I know is that it needs help.

I invite anyone with time on their hands to take a crack at redrafting it following MSCD guidelines. As usual, the first question I’d ask myself is, What category of contract language should it be?

I’ll offer my attempt early next week.

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.

10 thoughts on “Redraft This Sentence, MSCD Style”

  1. In any proceeding bought by [Buyer] in a court of competent jurisdiction to enforce any obligation of Sellers under this agreement, none of the Sellers shall object to [Buyer’s] request for specific performance or injunctive relief on the grounds that equitable remedies are not appropriate, nor shall they require [Buyer] to post bond or other security.

    The obvious problem with the original is that it purports to bind the court, which of course it can’t. Instead of expressing the sentiment of the clause as language of expectation or intention, I think it would be more effective simply to bar the sellers from raising the obvious objections. A court will do what a court will do, but this way it won’t be urged to do so by the party.

    • A very nice re-draft! I wonder whether this is better phrased as language of policy. For example, should this provision be akin to a governing law provision that “tells the court” which law to apply when interpreting a contract?

      Also, does the “none of the Sellers shall object…” formulation work? I think it is “MSCD compliant,” but does contravene the rule of replacing “shall” with “hereby has/have the duty to”? I tend to phrase prohibitions placed upon more than one party as “each Seller shall not…,” but have faced some opposition on that formulation from the grammar cognoscenti…

      • You raise good issues about how to come as close as you can to tying the court’s hands. It’s not impossible, witness definitions. If you define “black” to mean “white” or “double” to mean “triple,” the court can’t very well refuse to honor the definition. But if you define “irreparable harm” to mean “failure to issue shares as required,” a court which must find irreparable harm before issuing an injunction will doubtless decline to let the parties perform its judicial function for it. What comes to mind is Ken’s approach to “time is of the essence” provisions: specify the anticipated harm and hope for the best: “The Seller acknowledges that if it fails to timely comply with its obligation to sell shares to the Buyer under this agreement, it is reasonably foreseeable that Buyer will suffer irreparable harm in that it will (a) be unable to exercise its option to buy Whiteacre from Acme; (b) go into default under contracts with its major lenders; and (c) go into bankruptcy or out of business altogether.”

  2. The Parties intend that the Buyer’s remedies for breach of this Agreement will include specific performance and injunction. If the Buyer seeks a court order for any such remedy, the Seller shall not object on the ground that equitable remedies are not appropriate.

  3. Ken:
    Here is my cut at it:
    The parties intend that a court enforce the Seller’s obligation to sell the Shares to the Purchaser by specific performance. The Seller acknowledges that its breach or threatened breach of this obligation will cause injury for which the Purchaser will have no adequate remedy at law because the Purchaser will not be able to prove some damages to the degree required by law. The Seller waives any requirement for the Seller to post a bond or security for specific performance.

    Some relevant points —
    1. The original language didn’t really focus on what was important to enforce by specific performance. The “including, without limitation” bit struck me as something that would actually impair enforcement on the core issue. Saying that appropriate injunctive relief may be issued is a restatement of the law.
    2. I think it is better just to tell the court what you were after.
    3. My second sentence is to set a factual predicate to specific enforcement. Some courts say that you must have this regardless of what the agreement says about specific performance being appropriate. A recital of irreparable injury is often substituted here, but I prefer a statement of why you might suffer an injury for which there is no adeqate remedy at law.
    4. My third sentence is to attempt to waive the requirement of a bond. This is unwaivable in many jurisdictions, but this makes and attempt at it.
    5. On limitations to a court of competent jurisdiction, I agree with the other comments that this is unnecessary.
    6. Much of the rest is as effective as a magic spell. Mumbo-jumbo presto chango injuctive relief.

  4. I would be interested to know if anyone can point me to case authority that where a party agrees to an equitable remedy, he is estopped from arguing against it in court. I have heard this stated confidently by US lawyers in the context of those injunctive relief clauses in NDAs, but never seen any authority.

    • Mark – (with apologies for spamming the group) from Halsbury’s Laws of England, relevant footnote citations, try:
      Combe v Combe [1951] 2 KB 215 at 220, [1951] 1 All ER 767 at 770, CA, per Denning LJ; P v P [1957] NZLR 854; Beesly v Hallwood Estates Ltd [1960] 2 All ER 314 at 324, [1960] 1 WLR 549 at 561 per Buckley J (affd on another point [1961] Ch 105, [1961] 1 All ER 90, CA); John Burrows Ltd v Subsurface Surveys Ltd and Whitcomb (1968) 68 DLR (2d) 354, BC SC.
      1 See Moorgate Mercantile Co Ltd v Twitchings [1976] QB 225 at 241, [1975] 3 All ER 314 at 323, CA, per Lord Denning MR; revsd on another point [1977] AC 890,[1976] 2 All ER 641, HL.2 McIlkenny v Chief Constable of West Midlands Police Force [1980] QB 283 at 316, [1980] 2 All ER 227 at 235, CA, per Lord Denning MR; affd sub nom Hunter v Chief Constable of West Midlands Police [1982] AC 529, [1981] 3 All ER 727, HL. ‘Estoppel is when one is concluded and forbidden in law to speak against his own act or deed, yea, though it be to say the truth’: Termes de la Ley, Estoppel (cited in Ashpitel v Bryan (1863) 3 B & S 474 at 489; H v H [1928] P 206 at 214); Simm v Anglo-American Telegraph Co, Anglo-American Telegraph Co v Spurling (1879) 5 QBD 188 at 202, CA, per Bramwell LJ; Re Sugden’s Trusts, Sugden v Walker [1917] 1 Ch 510 at 516 per Neville J; on appeal [1917] 2 Ch 92 at 97, CA, per Bankes LJ. The term is thought to be derived from the old French term ‘estoupail’ meaning a bung or cork: see Co Litt 352a.


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