Another Guarantee Issue: Waiver of Presentment

As you might have guessed from my previous two posts, I’m working on a guarantee. Unsurprisingly, contains a sentence that refers to waiver of presentment.

I knew this day was coming, and I’ve long been prepared for it. I reached for Howard Darmstadter, Hereof, Thereof, and Everywhereof: A Contrarian Guide to Legal Drafting 197 (2d ed. 2008). (The discussion in his book is based on this 2002 article in Business Law Today.)

Howard Darmstadter is an interesting figure on the contract-drafting scene. I’ve never met him or corresponded with him, but I’ve read his articles with interest, and I cheerfully adopted one of his ideas. I suggest that his strength is that he’s a specialist in commercial and securities law.

That’s what allowed him to analyze in his book a sentence very similar to the one in the guarantee I’m working on:

The guarantor waives protest, presentment and notice of dishonor.

Howard explains that this sentence might have made sense before the 1990 changes to article 3 of the Uniform Commercial Code, but now it does not. Here’s his punchline:

So under post-1990 article 3, you can waive all suretyship defenses with “I waive defenses based on suretyship or impairment of collateral.”

Howard goes on to comment wistfully on how the copy-and-paste machine results in perpetuation of relics like the sentence that prompted his analysis. And I can confirm that waiver of presentment shows no signs of going away.

But a relative lack of intellectual curiosity might also be a factor, although I have no idea whether it contributes to the supremacy of copy-and-paste or is a consequence of it. Specifically, I’ve found zero trace of any discussion prompted by Howard’s analysis of that sentence.

I want to follow Howard’s recommendation for purposes of the guarantee I’m working on, but as a matter of scholarly rigor I don’t want to take his word for it. And it would be unpromising for me to start boning up on article 3 with a view to replicating Howard’s analysis. So UCC article 3 mavens, I welcome your input!

(By the way, however you express this concept, 98.3% of readers won’t have a clue what it’s about. But if the verbiage has been blessed by article 3, you go with it. And it’s unrealistic to expect that you could take the opportunity to also give the contract reader a quick tutorial.)

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.