CONTRACT-DRAFTING NOIR (Episode 338)
Man sitting in a nondescript motel room at night. Bright lamp illuminates him but leaves his face in shadow, as does his fedora. His voice is as world-weary as his slouch.
It’s real simple, see: Use the passive voice, drop the actor, bad stuff happens.
Today’s cautionary tale comes from another tipster in the contracts deep state. The opinion is ASR 2620-2630 Fountainview, LP v. ASR 2620-2630 Fountainview GP, LLC, No. 14-17-00271-CV, 2019 WL 470240 (Tex. App. Feb. 7, 2019) (PDF here).
No dreary recitation of dreary facts. Instead, check this out:
Under section 6.2, entitled “Distribution of Partnership Capital Event Receipts,” the Partners agreed that “[n]o later than fifteen (15) days after the closing of any Capital Transaction, all Partnership Capital Event Receipts (subject to requirements of applicable law with respect to the priority of other creditors of the Partnership, if any) shall be paid or distributed” according to a formula for calculating the amount of the distribution to the Class A Partners and possibly to the Class B Partner.
Passive voice (“shall be paid or distributed”) and no actor, so people get into a fight over whose obligation it was. The limited partnership? The general partner? Who knows. And I don’t care who won. I’m in the business of avoiding fights. Cleanup? That’s some other guy’s job.
Whenever a party is involved, use the active voice and nobody gets hurt. “X shall pay or distribute.” That’s it. But maybe some other time someone can tell me what “distribute” is doing in there.
Man gets up, face still in shadow, throws a $5 bill on the still-made bed, and exits the room.