Treating “This Agreement” as a Defined Term Is Silly

I’ve written about the defined term this Agreement more often than I might have expected. (See for example this 2018 blog post and this 2016 blog post.) Yet here I am writing about it again, because I’d like to have in one place all my arguments on the subject, including one I’ve articulated only recently—what’s under the heading “An Explanation.”

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A candidate for silliest defined term is this Agreement. But rare is the contract that doesn’t create that defined term. (Analogous defined terms include this Amendment, this Assignment, this Lease, and this Indenture.)

It’s Illogical

The definite article this in this agreement makes it clear which contract is being referred to. The title and introductory clause of a contract might describe that contract as, say, an asset purchase agreement or a franchise agreement, but that wouldn’t prevent you from referring thereafter to this agreement without making it a defined term.

And it’s best to use lowercase letters in any reference to contract. A reference to a contract isn’t like the title of a book or movie—it’s just a thing. It follows that it’s also best not to use a capital A in this agreement.

Weak Arguments in Favor

A given instance of this agreement might arguably refer to some part of a contract—a section, a subsection, an enumerated clause, a sentence—rather than the entire contract, but that would require catastrophically inept drafting. The likelihood of anyone making such an argument is remote. It would be preposterous to protect against that remote prospect by inflicting on every contract a defined term—this Agreement—that otherwise would be a distraction.

Sometimes this Agreement is defined to include attachments. That doesn’t make the defined term any more useful—if a contract provision mentions an attachment, that brings the attachment within the scope of the contract, without the need to say so explicitly.

Similarly, it would be counterproductive to create the defined term this Agreement just to include statements of work in the definition. It would be simpler and clearer to include in the contract a sentence saying that the contract includes statements of work issued under the contract. That would have the further advantage of allowing you to avoid creating a defined term that otherwise would serve no purpose.

An Explanation

What explains the near-universal illogical use of this Agreement as a defined term? At least in part, it might be a function of the legalistic urge to use initial capitals in referring to written work.

One example of that is giving initial capitals to a kind of contract or other document (as in references to “Agreement of Merger” and “Certificate” in this form of letter from the Delaware Department of State). Another example is law review articles that refer to “this Article” (and even use “this Section” or “this Part” when referring to part of the article). (That’s something I first mentioned in this blog post.) Academic writing in other disciplines doesn’t appear to have succumbed to that urge.

Those examples don’t treat the capitalized word or phrase as a defined term. Instead, it’s assumed that using initial capitals is somehow appropriate. But it’s not surprising that this Agreement has come to be treated as a defined term—creating defined terms is the standard mechanism by which contracts apply initial capitals to a word or phrase. But in the case of this Agreement, there’s no reason for doing so.

In a frenzy of cutting-edge research, I searched on EDGAR for the phrase this license agreement and examined the first 100 license-agreement introductory clauses that came up. In every one, this license agreement was stated in initial capitals or in all capitals (sometimes with this in initial capitals). In other words, the constituency that files stuff on EDGAR would seem to endorse enthusiastically giving references to a kind of written work special emphasis. (I have more sympathy for all capitals than I do initial capitals. Saying something in all capitals says, Sh*t be important! Saying something in initial capitals says, This here be like a book!)

And each of those 100 introductory clauses created the defined term this Agreement. That shows that in the EDGAR constituency, the urge to create defined terms prevails over semantic realities.

Get Rid of It!

Treating this agreement as a defined term is annoying, but otherwise it’s harmless. So don’t start a redlining war by lowercasing this Agreement in the other side’s draft!

But for purposes of your drafts, by all means use this agreement. If my experience in discussing this topic is any guide, you can expect this agreement to be met with skepticism ranging from puzzlement to consternation. That’s OK—it’s best that we show the legalistic-minded what rational drafting looks like.

You might have to allow the other side to make a global change from this agreement to this Agreement in a given draft, but the more they see this agreement, the more likely they are to apply some brain cells to the issue.

Who knows, this agreement might even be a gateway to a more sensible approach to drafting!

Some of you might be wondering why I don’t just quietly move on. There are contexts where turning a blind eye makes sense. For example, in a comment to this post on LinkedIn by Chris Schandevel, I asked why in the featured extract the word court is given an initial capital when preceded by the word this but otherwise is resolutely lower case. Chris explained that it’s standard practice to give court an initial capital when you’re referring to the court you’re currently appearing before. (Apparently, no one uses it as an excuse to create a define term!) So in my mind I did a Gallic shrug, then moved on.

That’s not what I’m doing in the case of this Agreement. Litigators giving court an initial capital reflects a decision made for an understandable reason. Creating the defined term this Agreement reflects only the copy-and-paste monkey mindset that has made mainstream contract drafting rife with dysfunction.

In that context, the defined term this Agreement offers too tempting a teaching moment for me to turn a blind eye.

Continued Silence

In this 2020 blog post, I note that people don’t take me on in the marketplace of ideas. I turn their cherished usages to so much rubble and … crickets.

The simplest reason for the silence is that I’m clearly right (at least in this case). But I’m partial to a broader explanation: people don’t care. It’s more than their job’s worth to give a rat’s ass about this Agreement. I can sympathize. Why do I care? Because I really, really, like order in the civic sphere.