“Shall Seek”

Welcome to shall seek, yet another unhelpful alternative to saying that a party has to use reasonable efforts to accomplish something. With shall seek, you’re saying that someone has to try to do whatever it is, but you don’t provide a standard. In each of the following examples from EDGAR, I’d use instead reasonable efforts:

When placing such orders, the Adviser shall seek to obtain the best net price and execution for the Fund …

If the Company is required to obtain from any commission or agency authority to issue any such shares of Common Stock, the Company shall seek to obtain such authority.

The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards …

The equivalent in language of prohibition, using shall not seek or no X shall seek, raises a different issue. Here are some examples from EDGAR:

No party to this agreement shall seek a jury trial …

… and the Company shall not seek to recover all or any part of such payment from the Executive or from whosoever may be entitled thereto, for any reasons whatsoever.

For the avoidance of doubt, the parties acknowledge that neither the Blocker nor the Company shall seek to enforce any such order for payment of the Financing Reverse Termination Fee during the two (2) Business Day period following such order or in the event the Closing is consummated.

I suggest that in each of these examples, the party in question is in effect waiving a right, so each should be revised to make that explicit. The test for whether it’s appropriate to use an obligation to address a given issue is whether a remedy for breach makes sense in that context. In each of the above examples, a remedy for breach wouldn’t make sense. With respect to the first example, if the other party seeks a jury trial, what you would want to have happen is for a court to forbid it; bringing suit for breach of contract would be a very indirect way of tackling the problem.

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.