“There Can Be No Assurance That”

The phrase there can be no assurance that is mealy-mouthed securities verbiage that has made its way into contracts. Some examples (with emphasis added):

There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to receive elective distributions on the same terms and conditions as the holders of Shares.

There can be no assurance that Owners generally or any Owner in particular will receive the notice described in paragraph (a) above in time to enable Owners to give instructions to the Depositary prior to the Instruction Cutoff Date.

There can be no assurance that the conditions precedent to implementing the ETF Conversion will be satisfied on a timely basis, if at all.

The phrase suffers from two fatal shortcomings:

First, because can doesn’t work as the main verb in a contract sentence (see this 2008 post), there can be no assurance that appears not to fall into any of the categories of contract language.

And second, beginning a sentence with there plus verb is weak writing, as you’re lumbering the sentence with a fake subject and fake verb; see MSCD 17.19.

The fix is simple enough: Instead of There can be no assurance that X will happen, use language of declaration: Acme acknowledges that X might not happen.

But don’t combine both approaches, as in this example:

The Company acknowledges and agrees that (i) there can be no assurance that the Designated Distribution Agent will be successful in selling Placement Shares, …

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.

15 thoughts on ““There Can Be No Assurance That””

  1. I think I agree, though I have some doubts about whether an acknowledgement that X might not happen states strongly enough that the [Seller] is not promising that X will happen. Would a disclaimer be an alternative route?

  2. I agree with the conclusion and the second reason. Still pondering the first reason, because it seems to rest on an implicit rule that a contract sentence is fatally defective unless its main clause belongs to one or another category of contract language. Is that MSCD’s position?

    Mark’s disclaimer suggestion triggers the following thoughts:

    (1) To what category of contract language do disclaimers belong?

    (2) If the underlying reason for stating the uncertainty of X is to make clear that, as Mark says, the Seller is ‘not promising that X will happen’, isn’t the purpose of the sentence to state, or more precisely to tee up, the Seller’s conditional lack of duty based on whether X occurs? If so, the pertinent category, at least under MSCD3, is discretion (‘if X happens [or doesn’t happen], the Seller is not required to….’) with a condition.

    • If something doesn’t fall into one of the categories of contract language, it has no place in a contract. So sez I.

      Regarding your other points, perhaps see the post I link to in my reply to Mark.

      • Good clarifying rule, stated (to my knowledge) for the first time today! Maybe make an exception for recitals, though, which are part of the contract but not of the body of the contract.

        As for the post on ‘disclaim’, it doesn’t categorize ‘disclaim’, which it criticizes on the sole ground that ‘simpler and clearer alternative[s]’, like ‘will not be liable’ and ‘is not making any warranty’.

        The former looks like language of discretion on the pattern of ‘is not required to’, and I forget the category to which the latter properly belongs: isn’t it like ‘Acme is not assuming the Excluded Liabilities’?

  3. Thank you for another thought provoking post. I agree that using “there can be no assurance” is poor drafting, but why not use “may” instead of “acknowledges and agrees” as the substitute? I say this because the excerpted language sounds like it is from an offering memorandum or other securities disclosure document that is not signed by the “Holders”. If the “Holders” are not signing the document, they cannot acknowledge and agree to it.

    The first paragraph could be re-written as: “The Holders may not be given the opportunity to receive elective distributions on the same terms and conditions as the holders of Shares.”

    And the second: “The Owners may not receive the notice described in paragraph (a) above in time to enable the Owners to give instructions to the Depositary prior to the Instruction Cutoff Date.”

    You may have noticed that I also deleted “Holders generally, or any Holder in particular” (and the “Owners” equivalent). I did this because it is sufficient to say “the Holders”, although reasonable minds may differ…

    • I think you misread my post: I recommend not saying acknowledges and agrees.

      And the first example shows how general recommendations can be irrelevant when you’re faced with actual examples. The first problem with your version is that it uses may to mean might; that’s never a good idea. The second issue is that it uses the passive voice; that too isn’t a good idea, unless you’re dealing with nonparties, which isn’t the case here. So I’d reword it to read “The Company will not be required to give the Holders the opportunity ….”

      Same idea with the second: “The Company will not be required to give ….”

      So for the first two examples, my general fix wouldn’t be the best fix.

      And sure, there’s all sorts of other junk in those examples that one could fix.

      • I read that you recommended saying “Acme acknowledges”, and I agree that the your general recommendation does not fit with the first two examples.

        Regarding “may” vs. “might”, I am not sure we can infer that the drafter intended to mean “might” (lesser degree of possibility) instead of “may” (greater degree of possibility) in each “there can be no assurance”.

        Since this appears to be a securities disclosure document without any parties except possibly the issuer, the passive voice seems appropriate, but I have not seen the document so I do not know if there are parties involved.

        Respectfully, your proposed re-wording of the second to “the Company will not be required to give…” changes the meaning of the language entirely so I am not sure that is a fix. I appreciate your good work.

        • I don’t mean to be annoying, but I don’t think you’ll find anything supporting the notion that might expresses a lesser degree of possibility than may. If you do, I’d be interested to see it.

          These examples are actually all drawn from contracts. I do only contracts.

          Whether my reworking of the second example is appropriate depends on the circumstances. If the company is the one giving the notice and timing depends only on when the company delivers the notice, my version works.

  4. In securities verbage, the general preference is to say “we cannot assure you” over “there can be no assurance”. Claiming that there can be no assurance is probably not factually supportable if the context is that the issuer can assure the securities holders but does not want to, or it could be a situation where the assurance might be obtained from a third party, but not the issuer.
    In the contract context, I would have thought that “Seller does not warrant… ” is an equally valid way to draft it, compare to “Buyer acknowledges…”. If the context calls for drafting that concerns a potential claim from a third party beneficiary or successor, “Seller does not warrant” cuts of the claim better than “Buyer acknowledges”.


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