“Without Prejudice”

You remember my post asking for readers to suggest terms of art that can’t be replaced with something clearer (here)? I offer with prejudice. Here’s how Black’s Law Dictionary defines the phrase:

with prejudice, adv. With loss of all rights; in a way that finally disposes of a party’s claim and bars any future action on that claim <dismissed with prejudice>. See dismissal with prejudice under DISMISSAL (1).

It’s routine for contracts to refer to courts dismissing claims with prejudice.

Well, how about the phrase without prejudice? Here, again, is the Black’s definition:

without prejudice, adv. (15c) Without loss of any rights; in a way that does not harm or cancel the legal rights or privileges of a party <dismissed without prejudice>. See dismissal without prejudice under DISMISSAL (1).

So without prejudice would seem potentially broader than with prejudice. It seems to get most use in Commonwealth countries, where it’s primarily used as a heading in documents exchanged in settlement discussions. (Go here to see PLC’s glossary entry for the term.)

That being the case, what is without prejudice doing in U.S. contracts? Here are some examples from EDGAR:

(v) if all or any portion of such Defaulting Lender’s LC Exposure is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of the Issuing Bank or any other Lender hereunder, all letter of credit fees payable under Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until and to the extent that such LC Exposure is reallocated and/or cash collateralized; and

This Right of Setoff is without prejudice and in addition to any other right to which Holder is at any time otherwise entitled under this Note (whether by operation of Law, Contract, or otherwise).

Such resignation shall be without prejudice to the contract rights, if any, of the Trust.

Without prejudice and in addition to any other contractual remedy the non-defaulting Party may have under this Agreement, either Party may terminate this Agreement in writing forthwith, if …

Without prejudice to the representations, warranties or covenants regarding the status of any party hereto as a Citizen of the United States, each of Owner Participant, Owner Trustee and Trust Company agrees that, during the Term, in the event its status is to change or has changed as a Citizen of the United States or it makes public disclosure of circumstances as a result of which it believes that such status is likely to change, it will …

… then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights …

The phrase without prejudice would seem a product of the same bureaucratic instinct that gave rise to notwithstanding the foregoing. You’d be better off omitting it or using something simpler. For example, instead of shall be without prejudice to, you could say will not affect.

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.