The other day, a reader of this blog—I’ll call him John—contacted me about a problematic bit of contract language. (I’ll refer to it as “John’s language,” although he didn’t draft it.) To him, it was something of a mysterious nuisance, but when I read it, my heart went pitter-patter, in that I saw that it would give me the opportunity to further explore the dark heart of may.
Here’s John’s language, with some cosmetic cleanup by me (it’s still not a thing of beauty):
Developer may develop and sell competing products with any of its current partners, subject to a 50% reduction in royalties.
John wanted to know whether the developer would be in breach of contract if it were to develop and sell competing products on its own. To provide him with an answer, I had to look into two issues.
The Scope of Discretion
One issue is the scope of the discretion granted in John’s language.
To make things easier, let’s consider a simpler sentence that exhibits a comparable structure:
-  You may attend the party wearing shorts.
[1a] You may attend the party only if you wear shorts to it.
[1b] You may wear shorts to the party.
Sentence  is ambiguous. If taken at face value, it conveys the meaning expressed in [1a]—the discretion granted applies equally to attending the party and wearing shorts. By contrast, in [1b] the discretion granted applies only to wearing shorts. The meaning expressed in [1b] is possible only if permission to attend the party was granted in an previous utterance (You may attend the party), so that in  it can be taken as a given.
But neither of these meanings helps John’s client, the developer. It’s interested in developing and selling competing products on its own rather than with one or more of its current partners, and a meaning analogous to that expressed in [1a] wouldn’t allow it to do that. And whereas a meaning analogous to that expressed in [1b] would be entirely possible in conversation, the required repetition would seem unlikely in the rigid context of a contract.
So how could one express the meaning sought by John’s client? By incorporating a separate grant of discretion for each component, as in the following sentence:
-  You may attend the party and you may wear shorts to it.
In other words, to express the meaning sought by his client, one would need to revise as follows John’s language: “Developer may develop and sell competing products and may do so with any of its current partners, subject to a 50% reduction in royalties.”
Although neither meaning expressed in John’s language helps the developer, it could achieve its goal by another route. It could claim that the language had been inartfully drafted—in effect, that omitting and may do so was a mistake and didn’t reflect the intent of the parties. This would seem a plausible argument—it’s unlikely that the parties had in mind that the developer could sell competing products with its partners but not on its own. Courts are receptive to this sort of argument. For example, they’re willing to read and as meaning or, or vice versa, if that would better reflect the intend of the parties. (That’s something I discuss in MSCD 8.70 and in this article.)
Expectation of Relevance
Assume that the developer had been unable to convince the other party, or a court, that a meaning analogous to that expressed in  was what the parties had intended to express in John’s language. It could in theory attempt another argument—it could claim that the discretion afforded in John’s language isn’t limited.
The logic behind this argument is as follows: if I grant you the discretion to attend the party wearing shorts, I’m not thereby precluding you from attending the party wearing trousers, a dress, or any other article of clothing. With respect to John’s language, the developer would claim that discretion to develop and sell competing products with its current partners doesn’t constitute a prohibition against its doing so by itself.
It’s certainly true that a grant of discretion to do one thing doesn’t necessarily constitute a prohibition against doing other things. If I tell you that you may go to the movies, it wouldn’t necessarily follow that I’m thereby forbidding you from engaging in any alternative activity.
But the presumption that a grant of discretion doesn’t also constitute prohibition comes up against the notion of relevance. The more specific a grant of discretion is, the more likely it is that the reader would conclude that the discretion is limited. If that were not the case, there would be no point in being so specific. Consider the following example:
- A student may withdraw from courses before the end of the fourth week of classes.
Strictly speaking, this sentence is open to the interpretation that withdrawal is possible after the fourth week, but the usual interpretation would be that withdrawal is allowed only before the end of the fourth week of classes. Also being able to withdraw afterwards would seem to render this sentence pointless.
If you consider John’s language from that perspective (and assume that it conveys a meaning analogous to [1a]), there would seem no point in granting the developer discretion to sell and develop competing products with its current partners if it were also free to do so on its own.
So in the unlikely event of a court’s holding that John’s language conveys a meaning analogous to [1a], it’s hard to imagine the developer skirting the expectation of relevance and convincing the court to hold that the discretion granted in John’s language isn’t limited.
But here’s an important drafting consideration: If you grant discretion and want it to be limited, you should make that explicit rather than relying on the expectation of relevance. You accomplish that by using may … only: “Developer may develop and sell competing products only if it does so with any of its current partners, subject to a 50% reduction in royalties.”
I mention may … only in MSCD 3.55, but the next edition of MSCD will contain a full discussion of the expectation of relevance and limited discretion.
A Note of Thanks
In mulling over John’s language, I was privileged to be able to bounce ideas off Professor Jeffrey P. Kaplan, chair of the Department of Linguistics and Asian/Middle Eastern Languages, San Diego State University. I’m responsible for any residual incoherence.
And thanks to reader Martin Clausen for prompting a refinement.
1 thought on “Two Aspects of “May”—A Case Study in Interpreting Contract Language”
This language strikes me as problematic for another reason. Does the royalty-reduction provision apply if the developer acts on its own?
The “subject to” language could be read as a limitation on the developer’s authority to cooperate with its partners. Consider the phrase, “You may attend the party wearing a Speedo, but only if you pay a $5 charge.” A reasonable interpretation of this phrase is that I am invited to the party, but must pay to wear my slinky swim trunks (a very low price in light of the emotional trauma that would be imposed on the other party-goers). In the same vein, a reasonable interpretation of the contract provision is that the developer is authorized to develop products, but must pay to work with third parties.
Obviously, any interpretation depends upon the context supplied by the rest of the contract. But taking this provision alone illustrates one of the principle problems of legal drafting–too much material in too little space.
There are three separate issues crammed into a single sentence: (i) the authority to develop products; (ii) the cooperation with third-parties; and (iii) the conditional royalty reduction. By dealing with these issues in two or even three sentences, the author would have been able to control the interplay between the three issues. By forcing them into one brief sentence, he or she has surrendered much of that control.