“Relating To”: Winning a Fight Is a Distant Second to Not Getting into a Fight

Today I received a tip from reader Brad Axelrod. He told me about the recent opinion of the Delaware Court of Chancery in Intrepid Investments (here).

This case involves a fight over interpretation of a provision in which the parties agreed to exclusive jurisdiction of Delaware courts “[a]s to any dispute, claim, or litigation arising out of or relating in any way to this Agreement.”

Here’s what the court said (footnotes omitted):

This Court has “considered the connector ‘relating to’ to be ‘paradigmatically broad.'” Indeed, the term “relating to” is one of the “far-reaching terms often used by lawyers when they wish to capture the broadest possible universe.” Given its breadth, “[a] provision that extends to matters ‘relating to’ an agreement encompasses any issues that touch on contract rights or contract performance.”

I leave you to consult the opinion for details of the dispute. I want to make a more general point.

The legalistic mindset is partial to the notion of “tested” contract language. The argument is that if courts have had occasion to say what a given word or phrase means, that phrase has been “tested,” so it’s safe to use that word or phrase to express the meaning sanctioned by the courts. (For more about “tested” contract language, see the first five of my blog posts listed here.)

But the key flaw in the notion of “tested” contract language is that the language that has been tested is confusing. If it weren’t confusing, it wouldn’t have had to be tested! And if it’s confusing enough, having a court apply a gloss to the meaning of a given word or phrase won’t come close to dispelling the confusion.

The phrase relating to is a great example of the futility of relying on “tested” contract language. If the circumstances present contract parties with a spectrum of connectedness, how far down that spectrum does relating to reach? In everyday usage, it’s impossible to say, beyond assessing what would be reasonable in the circumstances.

In an attempt to give relating to a measure of predictability, courts in Delaware and elsewhere have applied the gloss alluded to in the Intrepid Investments opinion. But the language at issue in that case had been “tested,” yet the parties ended up fighting over it anyway! In so doing, they joined a long list of contract parties that have found themselves fighting over the meaning of relating to.

The problem is that you cannot rely on contract parties and their lawyers to be aware of a legalistic gloss applied to a vague phrase that’s in common usage. And even if they were aware of it, you can’t rely on their not electing to fight anyway about what relating to means.

So instead of expecting that everyone will apply to a confusing word or phrase the meaning that courts have applied to it, don’t use that confusing contract language! Instead, say clearly whatever you have in mind.

With your indulgence, I’m not going to go explain how you go about that in the case of relating to. I’ve already done so in this 2013 blog post. It cites the third edition of A Manual of Style for Contract Drafting, but the fifth edition says broadly the same thing.

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.

3 thoughts on ““Relating To”: Winning a Fight Is a Distant Second to Not Getting into a Fight”

  1. It seems to me that “relating to” is pretty clear. If a party goes into litigation claiming otherwise, that is frivolous, and the judge should smack that party’s attorneys down with steep sanctions and a referral to the bar disciplinary committee.

    Just because someone litigates over language doesn’t mean the language is inferior. It could mean that the lawyer is throwing in everything but the kitchen sink, or trying to churn his client with excessive billing. That lawyer needs to get a spanking.

    • I don’t know how often it actually happens, but I still think that judges could force a little more common sense on litigants. Perhaps the frequency of litigation relates directly to (see what I did there?) overly-indulgent judges.


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