Well, I guess it’s language of performance’s turn in the spotlight, since this is my third post on the subject today.
Below is a sentence from EDGAR that uses language of performance to appoint an agent. It’s following by a version using language of obligation.
The Fund hereby appoints the Agent as its “Investor Servicing Agent” on the terms and conditions set forth herein.
The Agent shall act as the Fund’s “Investor Servicing Agent” in accordance with this agreement.
And here’s another such pair:
The Fund hereby appoints ALPS to provide administrative, bookkeeping and pricing services as are set forth in Appendix A, as amended from time to time, upon the terms and conditions hereinafter set forth.
ALPS shall in accordance with this agreement perform for the Fund the administrative, bookkeeping, and pricing services stated in appendix A.
I suggest that the versions using language of obligation convey the same meaning, and do so more simply. So I suggest that you use language of performance to appoint someone only if in that business context it’s standard to refer to appointment.
Can you suggest examples?
3 thoughts on “When to Use “Hereby Appoints””
“Appoint,” “engage,” “retain,” and even “employ” are words that convey the establishment of a status relationship between the parties. So, where that status relationship is important, these are words that do a certain amount of work. “Appoint” is very common in the world of distribution arrangements, where both parties want to make it clear that the appointee has an authorized status–usually involving obligations to provide support to customers on the part of the appointee and a concomitant (though by no means universal) restriction on competition from the appointer and even other appointees. Words like “retain” and “employ” also trigger, in some contexts, legally regulated relationships. For that reason, they should be used with circumspection.
I concur with Vance, especially as to any agency. They are rare enough that using odd language to emphasize agency is worthwhile.
If a drafter can convey the same meaning using different categories of contract language (performance or obligation), doesn’t that mean that categories of contract language are matters of form, not substance?
Another example: ‘Acme is not required to pay the Excluded Liabilities’ (language of discretion) and ‘Acme is not assuming the Excluded Liabilities’ (language of policy).
Here’s another proposition: language of obligation is a subset of language of performance. Every assumption of a duty by words is a speech act.
The disciplined use of ‘shall’ (your great recommendation!) masks the performative nature of assumptions of duty. Drafters say ‘Widgetco shall deliver Acme 10 Widgets a month’ (obligation), not ‘Widgetco hereby takes on a duty to deliver Acme 10 Widgets a month’ (performance). Yet the latter is what the former actually means, yes?