[Updated 23 February 2024]
Some people feel strongly that one shouldn’t use the article the with party-name defined terms that consist of a common noun. In other words, say Company, not the Company.
Here’s what I say about that in A Manual of Style for Contract Drafting:
If the defined term for a party name is a common noun, use the definite article—the Purchaser rather than Purchaser. It’s less stilted, and that more than offsets the marginal economy afforded by eliminating every instance of the from the defined term.
But I haven’t stated my case as completely as might have, so I’m using this post to do just that.
There’s No Grammar Problem with Using “The”
I’m aware of three arguments that bear on this issue. First, I’ve heard it suggested that it’s at odds with grammar to use the with a defined term—that saying the Company is as awkward as saying the Acme.
I didn’t understand this objection, but an Australian reader explained it to me: if you use the with the defined term Landlord and when defining Landlord you put the before the opening quotation marks, and the landlord is Acme Holdings, Inc., or is Juanita Lee, you’re in effect attributing to the landlord the name the Acme Holdings, Inc. or the Juanita Lee. If you were to put the within the quotation marks when defining Landlord, the word the wouldn’t be added before the actual name of the landlord, so all would be in order grammatically.
Well, I’m here to tell you that that’s massively pedantic! When you use the in defining Landlord, the landlord’s actual name is replaced with the Landlord. It doesn’t matter that the is placed before the opening quotation marks—the opening quotation marks are placed after the simply because the word the isn’t the distinctive component of the defined term.
So what we’re left with is that dropping the when using company is a grammatical mistake—one wouldn’t say, for example, I’ve been working at company for five years—so it makes sense to use the with the defined term Company.
Dropping “The” Achieves No Useful Economy
And second, those in favor of dropping the cite the economy it affords. In a 90-page merger agreement, switching from the Company to Company might save you 800 instances of the! That’s two-thirds of a page of thes!
The number of words in a document gives you a rough idea of how much work it will take to read it, but how many words you save or spend in expressing something one way, as opposed to another way, is only one factor in determining how best to say it. In this case, dropping all those thes comes at the cost of imposing a stilted, nonstandard structure on the reader.
But more to the point, not all extra words are equal. If I were to add to a contract 800 additional words in the form of instances of notwithstanding the forgoing, witnesseth, attorn, joint and several, and material, I’d break out in a cold sweat. But 800 additional instances of the impose almost no cognitive workload.
And regarding an extra two-thirds of a page of space taken up by extra thes, it would be quaint for anyone to be concerned about the marginal use of extra paper and ink, particularly as documents aren’t printed as often as in ancient times. (For the same reason, picking a typeface that allows you to cram more words on a page is beside the point.)
The “Search-and-Replace” Argument Isn’t Compelling
Regarding the third argument, here’s what I say in MSCD:
Some drafters prefer to omit the definite article to avoid problems with careless search-and-replace (with the Buyer becoming the Acme) if someone replaces the common-noun defined term with a name-based defined term. But paying some attention is all that’s required to avoid that problem.
So I say, game, set, and match in favor of retaining the for party-name defined terms that consist of a common noun.
“Merger Sub” and “Parent”
But I’ve noticed that in M&A contracts, the defined term Merger Sub is generally defined without the. The same goes for its companion defined term, Parent. And I’m fine with that. Compared with Company, the defined term Merger Sub is more of a nickname, and it seems suitable to give Parent the same treatment you’re giving Merger Sub.
I’m on the fence as to whether there should be a proscriptive rule. This seems to be more a matter of taste. While I generally omit the leading “the” on defined terms that are common nouns, I never object if the other side wants to reinsert. With the exception below, I don’t perceive the lack of a “the” as being stilted. But I’m likely inured from years of doing that.
The exception is the “the” in front of “Company,” “Corporation,” “Partnership,” and other common nouns used to denote business entities. It feels grossly awkward to omit “the” in those cases. I would be interested to know whether others share this sense.
Hi Daniel. I don’t use the world “rule”, as it suggests something imposed or generally accepted. No one’s imposing anything, and in mainstream contract language much that doesn’t make sense is generally accepted, and much that makes sense isn’t generally accepted. So I prefer “guidelines”.
I don’t regard this as a matter of taste. Invoking “taste” can be a way of rationalizing bad habits. I suggest that’s the case here. There’s no principled distinction between opting for “the” when the common noun is “Company” but not when the common noun is, say, “Investor”. Or “Shareholder”. Or “Licensee”.
Thanks for being fair and providing both arguments for dropping ‘the’ and your counter-arguments for keeping ‘the’, and not just the latter. I am on the fence myself but, I must say, I actually found the arguments you restated for dropping ‘the’ much more convincing than otherwise! Based on just the above, I would not call it game, set and match for either side just yet.
¯\_(ツ)_/¯
I agree with your take on the matter and would add only that the definite article belongs outside the inverted commas: ‘(those assets, the “Trust Corpus”)’.
Given the growing prevalence of document building tools, and less dependence on unwieldy templates, maybe we should solve the problem by just avoiding common words as party names? Certainly our readers, particularly the non-lawyers, have an easier time reading Acme and Beta (sans “the”) versus the Company or the Buyer.
Hi Michael. Here’s what MSCD 2.79 has to say:
When selecting the defined term for a party name, you can base it on the
party’s name (see 2.99–.102) or on a common noun such as the Company
or the Shareholder (see 2.103–.108). Generally, defined terms based on
party names make a contract slightly more accessible to the reader. But
common nouns work well in the following situations:
. if the parties play standard, clearly defined roles, such as lender
and borrower, or landlord and tenant
. if the contract focuses on a single entity, as is the case with a
limited-liability-company operating agreement or a shareholders
agreement
. if the identity of the signers is not yet known
I enjoy your work, Ken. On this issue, I like the Australian’s explanation, and it feels like your criticism of that explanation as “pedantic” is bit of a cop-out. What you describe as “stilted” seems to me to be a benefit to removing the “the”. It reminds the reader/writer that a specific person or party is being referenced. To me it serves a similar function as the capitalization of a term that is not ordinarily capitalized. After all, there is no requirement that a defined term be capitalized.
Hi Patrick. A cop-out? I think it’s sufficiently pedantic that it wouldn’t serve any purpose going into greater detail.
On your entirely separate second point, I don’t see any benefit to removing “the” to signal a defined term: the initial capital does indeed serve that function, and less obtrusively.