MSCD 17.16 deals with the phrase to the extent that. It makes the simple point that although to the extent that is appropriate when the degree to which a provision applies depends on some variable, drafters often use to the extent that when if would be more appropriate. Here are three examples:
To the extent that [read If] an Award is intended to constitute qualified performance based compensation within the meaning of Section 162(m), the Performance Goals must be established within 90 days of the beginning of the Performance Period.
The Company may, to the extent [read if] permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to a Participant.
All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A to the extent that [read if] such reimbursements or in-kind benefits are subject to Section 409A.
But that’s not what prompted this blog post. Instead, I revisited to the extent that (and to the extent plus adjective, as in to the extent permitted) because a participant at one of my Geneva “Drafting Clearer Contracts” seminars asked me about a variant, if and to the extent that. That phrase unhelpfully combines both conjunctions. Instead, use if or to the extent that, but not both:
… ; provided, however, that an allocation pursuant to this Section 10.2(a) will be made only
if andto the extent that such Member would have an Adjusted Deficit Capital Account after all other allocations provided for in Section 10.2 have been tentatively made as if this Section 10.2(a) were not in this LLC Agreement.
provided, however , that, if applicable law so permits, indemnification may nevertheless be made by the Company in such event if
and only to the extent thatthe Court which is considering the matter shall determine.
The same applies to the following variants:
The Executive shall have the status of general unsecured creditor of the Employer, and this Agreement constitutes a mere promise by the Employer to make payments under this Agreement in the future
as andto the extent provided herein.
The failure to so notify the Company shall
notrelieve the Company of any obligation which it may have to Indemnitee under this Agreement or otherwise unless and onlyto the extent that such failure or delay actually and materially prejudices the Company.
While I’m at it, it’s pointless to add fullest or some variant to to the extent:
It is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, its directors and officers to the
fullestextent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
The provisions of this Agreement are severable, and if any part of it is found to be unlawful or unenforceable, the other provisions of this Agreement shall remain fully valid and enforceable to the
maximumextent consistent with applicable law.
IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE
GREATESTEXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
It’s also pointless to add only or solely to to the extent (see also the example four examples above this one):
The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder and
solelyto the extent the Company has been authorized to disclose the identity of such Person or Persons, the Person or Persons through or with whom such Subsequent Financing is proposed to be effected and shall include a term sheet or similar document relating thereto as an attachment.
And observe the following bit of nonsense rhetorical emphasis:
or (z) to the extent
, but only to the extentthat a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents.
As usual, all examples are from the U.S. Securities and Exchange Commission’s EDGAR system. They may be hazardous to your health.
9 thoughts on “Revisiting “To the Extent That””
While I agree that logically the meaning of the modified indemnification paragraph doesn’t change, it feels different. I think that’s because the modified language seems to lean toward relieving the indemnitor of the obligations while the original leaned away. I’d probably leave the original “not” in place and put an “except” in front of “to the extent” to preserve that nuance.
Richard: Your change is perhaps more faithful to the original, but I’m undecided as to whether it affects the meaning in any way. Ken
Ken: Will your model severability provision be updated to reflect this new stance? I recall “to the minimum extent” being used in that provision. https://www.adamsdrafting.com/feast-your-eyes-on-koncisions-new-severability-provision/
Mark: Wow! It’s great to have such eagle-eyed readers!
But “to the minimum extent” is different from “fullest.” For purposes of severability provisions, the idea is that you modify the provision only as much as is required to comply with law. At the other end of the spectrum, all that matters is compliance, not the extent of that compliance.
Ken: I figured I’d do my part! I’m actually a software engineer by trade, so take my feedback as you will.
I submit that “to the extent necessary to make it enforceable” is the same as “to the minimum extent…” – and you should drop the “minimum” if you’re going to commit 100% to this new stance.
Here’s why: When you are using “to the extent,” what you are really saying is that you want the specified action to continue to (and stop at) a certain point. So in the case of your severability provision, the action is “modifying [the provision]” and the stopping point is “to make it enforceable.” I would even suggest that “necessary” is unnecessary (no pun intended), but the sentence doesn’t sound quite as nice.
As Richard touched on, sometimes a provision might feel different, and I think your initial analysis of “to the minimum extent” in your reply might have been motivated by feeling instead of sticking to your guns on removing the modifier.
Mark: I reckon that software engineer isn’t a bad background to have when it comes to wrestling with contract language.
Regarding your language point, I’ll turn to it in the next couple of days. I just returned from an agreeable dinner in Hamburg, so my brain’s not firing on all cylinders.
I couldn’t say without seeing the contract. If the intended meaning were “if,” the calculation would be simple. If instead payment tracks the exact amount by which revenues from the previous 24 months exceed revenues of the first twelve months, the contact would presumably have to provide some mechanism for how that would work.
Thanks, Ken. As you can probably guess, there’s a dispute involving this specific language in a contract. As far as I can tell, this sentence is the only place in the contract where there’s a suggestion that the second annual payment is based on the difference between the first and second year revenue, as opposed to the total revenue in the first two years. For what it’s worth, the letter of intent which was agreed upon prior to the contract definitely implies that annual payments are based on total revenue, but not sure if that helps in a dispute. And the other party to the contract has since been purchased by another entity, and they’re choosing to play hardball.
Thank you for clarification. I’m studying the lsat and there’s this phrase and I couldn’t figure out what it means in the context. Knowing now that it means if, it all makes sense.