While analyzing the usages in a contract I pulled from EDGAR (more about that in due course), I spotted the following:
Company will not, and will not knowingly or negligently allow any third party to [do various things].
But does it make sense to impose an obligation on someone not to act negligently? Is that equivalent to imposing an obligation on someone not to commit a tort?
No, I don’t think it is equivalent to imposing an obligation on someone not to commit a tort. Imagine that the curator of the Acme Museum of Antique Cars is obsessive about maintaining the impeccable shine of the cars in the museum’s collection. The cars are on public display, and the great unwashed have a habit of putting their grubby fingers on the cars. So in a contract with the company that provides the museum’s guards, the curator inserts the following: “GuardCo shall not knowingly or negligently allow visitors to touch the cars.” It wouldn’t make sense to read that as imposing on GuardCo an obligation not to commit a tort. Outside of the confines of the contract, if the curator were to bring a tort claim for negligence against GuardCo because guards had failed to prevent visitors from touching the cars, that claim would be laughed out of court. Tort claims are intended to address breach of society norms; they’re not intended to address an individual’s pet peeves.
But if this kind of provision can’t reasonably be considered to relate to tort standards of care, it’s a bad idea to use in it the word negligently, which is a torts term of art.
I think the drafter should have employed a different, and utterly standard, contract usage: an obligation not to negligently allow someone to do something is better expressed as an obligation to use reasonable efforts not to allow someone to do something! So here’s how I would have phrased the language that prompted this post:
Company shall not do, and shall use reasonable efforts to prevent nonparties from doing, the following: [list various things].
There’s no end to the fascinating nuances in contract language! You can look forward to a version of this discussion appearing in the chapter on efforts provisions in the fourth edition of MSCD. Unless, of course, further reflection show this to be a load of piffle.
9 thoughts on ““Shall Not Negligently””
I’d argue that you’d get a very similar result by simply removing “knowingly or negligently” from the original language, yielding “Company will not, and will allow any third party to [do various things].” This imposes an obligation on the Company not to allow certain things. If the Company allows one of those things to occur through negligence, has it not breached that obligation?
What your version doesn’t capture is what “negligently” was intended to achieve: you breach the contract only if by acting reasonably you could have stopped the activity in question but you failed to do so.
I see. You’re right, the obligation in my version is broader than the original likely intended. I’m not sure it’s absolute — I’d expect a court to impose some reasonableness standard regardless — but it’s broader.
In your museum guard example, what if the contract just said: “GuardCo shall not allow visitors to touch the cars.” And then of course a visitor touches a car. My sense is that the court might read in a “reasonable efforts” limitation into that term, rather than a strict liability reading.
I suspect that to get a strict liability obligation into the contract, the museum would have to include some sort of indemnification provision that specifically states GaurdCo is liable for all damages (cost of repair, further cleaning, lost ticket income, etc.) caused by any touching of the cars. But absent that sort of provision, don’t you think a court would interpret “shall not allow” to mean “shall take reasonable effort to prevent”?
Because the language in question used “negligently,” your question is one that I didn’t need to address. I could see someone arguing that one could comply with a “shall not allow” obligation simply by decreeing that the action in question isn’t allowed; whether that policy works is a separate issue. You can expect a blog post about this.
There is a further distinction. “Shall not allow” sounds awfully like “shall not give permission to.” That would imply only a knowing act can be a violation. If I wanted to impose strict liability, I would say “shall prevent.”
See the next post!
Assuming that you want to create a standard equivalent to negligence, I think you would use “reasonable care” rather than “reasonable efforts”? So you might say “Company shall take reasonable care to prevent ….”. In some cases these might amount to much the same thing, but I don’t think that will always be the case.
Alternatively, you could create a flat obligation but then exclude liability unless cause by negligence (or by wilful default or fraud), which is the usual approach.
I think either of these options are better than saying that you will not do something “knowlingly or negligently”. I particularly dislike “knowingly” in this case, because one can know that one is about to fail to prevent something while not being in any way negligent, or having any intention. (If the security guard sees the child extend his grubby paws towards the antique car, but is unable to prevent him touching it, hasn’t he “knowingly” allowed it to happen? The only escape here is to rely on a helpful definition of “allow”, but if you are seeking to do that then “knowingly and negligently” is redundant).
I agree. In addition, imposing a duty not to be negligent is an implicit double negative, the difference between “shall not fail to be careful” and “shall be careful.” Imposing a duty of care is more elegant.