“Voluntarily” and “Freely”

In this post I promised that I would write about voluntarily. Rejoice, friends—that time has come. As a bonus, I give you also freely.

The problem with both words is that the whole idea of a contract is that you enter into it because you want to and you agree to everything that it contains, so voluntarily and freely go without saying. Also, without getting into any deep analysis of free will, if you do something because business considerations leave you no other choice, are you doing that voluntarily?

I conclude that you can do without involuntarily, although you need voluntary when referring to bankruptcy, and can do without freely, unless you’re referring to securities.

But let’s look at each word.

“Voluntarily”

I fished from the Gowanus Canal EDGAR some specimens featuring voluntarily, to which I added comments:

  • Confidential Information does not include information once it is voluntarily disclosed to the public by the Company, … [This suggests that confidential information remains confidential if the company is forced to disclose it. That doesn’t seem helpful.]
  • … and shall not be voluntarily disclosed to any other person, except as may be required by law. [Presumably the idea of involuntary disclosure is covered by the exception.]
  • … until that employee’s employment with the Company has been voluntarily or involuntarily terminated for at least six (6) months … [If this applies whether the employee quits or was fired, say that instead. Or “ceases to be an employee for any reason.” Anything but “voluntarily or involuntarily.” @danielschwartz confirms here that that’s an oddity. As @bradleybclark notes here, the idea of being terminated voluntarily is awkward.]
  • … Restricted Shares may not be … encumbered, either voluntarily or involuntarily, until the restrictions have lapsed and the rights to the Shares have vested. [It doesn’t make sense to prohibit someone from involuntarily encumbering shares, because that person wouldn’t be the one doing the encumbering.]
  • LICENSEE, AFFILIATED COMPANY or SUBLICENSEE … shall make all payments to JHU as due and when due, unless LICENSEE or SUBLICENSEE has prior to the payment becoming due, voluntarily and completely terminated this Agreement. [How does someone involuntarily terminate a contract?]
  • … and hereby knowingly and voluntarily releases and forever discharges Lender … [As opposed to releasing the Lender because of the Lender’s terrible threats of bodily harm?]
  • The Borrower may, upon notice from the Borrower to the Administrative Agent, at any time or from time to time voluntarily prepay Revolving Loans in whole or in part without premium or penalty … [Who heard of involuntarily prepaying a debt?]
  • … voluntarily or involuntarily enters bankruptcy or receivership proceedings. [Well, here one context where involuntarily makes sense, but it would be clearer to say “anyone commences an involuntary case against” the party in question. So sez my article on termination-on-bankruptcy provisions, here.]

“Freely”

More from EDGAR (make sure you check out the last example, featuring freely tradable):

  • The Membership Interest constitutes movable (personal) property and, subject to Section 6.06, shall be freely transferable and assignable in whole but not in part … [Why not just say “transferable”? If you want to make it clear that no consent is required, say that.]
  • During the Research Term, Blueprint will maintain and share freely with Alexion a list of all Compounds, and all associated data for such Compounds. [Why not just say “share”?]
  • Each Party acknowledges … having negotiated and freely entered into this agreement. [You don’t need to tell us that no one had a gun to their head.]
  • This Agreement shall be freely assignable by the Company without restriction … [This is a complete mess, but considering just the “freely” part, “may assign” would do the trick.]
  • Landlord may thereafter freely lease all or a portion of the Expansion Space to any other party, at any time, on any terms, in Landlord’s sole discretion. [What’s wrong with “may lease”?]
  • The Rights Agent may … otherwise act as fully and freely as though it were not Rights Agent under this Agreement. [What’s wrong with “may act as though”?]
  • Executive is entering into this Agreement, including the provisions set forth in Section 4 hereof, knowingly, freely and voluntarily in exchange for good and valuable consideration. [Gawd help us.]
  • “Freely Tradable” means, with respect to any Notes, that such Notes are eligible to be sold by a Person who is not an Affiliate of the Company or the Guarantor (within the meaning of Rule 144) and has not been an Affiliate of the Company or the Guarantor (within the meaning of Rule 144) during the immediately preceding 90 days without any volume or manner of sale restrictions under the Securities Act. [You can find lots of contracts on EDGAR that use the phrase “freely tradable,” but as noted in this post on the North Texas SEC Lawyer blog, “the term “freely tradable” is not used anywhere in state or federal securities laws for a simple reason—that concept does not exist under the law!” It follows that generally it shouldn’t be used in contracts either, but using it as a defined term seems unobjectionable.]

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.