Here, from EDGAR, are instances of obligations being referred to as irrevocable: “Reimbursement Obligation” means the absolute, unconditional, and irrevocable obligation of the Borrower to reimburse the Issuing Bank for any drawing honored by the Issuing Bank under a Letter of Credit. The obligation of Borrower to make payments hereunder and to observe and perform all of its other obligations … Read More
I’m back at Notre Dame Law School, teaching an intensive course in contract drafting—one semester crammed into just under three weeks. As usual, the categories of contract language—my term for how verb structures determine function—is taking a lot of our time. To help my students become familiar with this topic, we looked at some problematic sentences and considered alternatives with more … Read More
At MSCD 3.168–.196 and in this article, I discuss why the phrase at its sole discretion and its variants are pernicious. That’s because the unfettered discretion that it seems to suggest can fall foul of the implied duty of good faith. Peter A. Mahler (@PeterMahlerEsq) of the law firm Farrell Fritz offers in this post on his New York Business Divorce blog … Read More
Last week, something I saw in a contract I was reviewing prompted me to fire off the following tweet: "Acme hereby waives the right to" = "Acme shall not": use language of prohibition, not language of performance? — Ken Adams (@AdamsDrafting) August 6, 2016 As is often the case, it has to do with the categories of contract language. The … Read More
There’s no end to the suboptimal alternatives to may. Here’s another—is permitted. You see is permitted to when a party is the subject of the sentence or clause: … Sponsor is permitted to assign this Agreement in connection with a merger or a sale or transfer of substantially all of its assets … … neither the Seller nor the Purchaser shall … Read More
Here’s an example of what MSCD calls “passive-type policies”: Interest is payable at a rate of 8% per year. Here’s part of what MSCD 3.244 has to say about passive-type policies: Some policies are characterized by adjectives such as exercisable and payable and have a structure that’s analogous to the passive voice. This manual refers to such policies as “passive-type policies.” Passive-type policies have … Read More
I regret to report the sudden and unexpected demise of one of the categories of contract language, namely language of belief. Well, I don’t really regret it. In fact, I’m relieved. Language of belief was a scrawny, frail creature who stood around not doing much of anything other than picking its nose, gazing into space, and getting in the way … Read More
From reader Ben King, general counsel of Jive Communications, I learned about a 2016 opinion of the Supreme Court of Utah, Mind & Motion Utah Investments, LLC v. Celtic Bank Corp., 2016 UT 6, 367 P.3d 994 (PDF here). The moral of this particular story is that if you want a contract provision to be interpreted as a condition, you had better make sure it’s worded … Read More
Do you remember be and hereby is? In this 2007 post I dubbed it “the lamest drafting usage.” Well, we now have another contender. I can’t believe I haven’t written about it previously. It’s—drum roll, please—agrees to and does hereby. The lameness is something to behold. What makes it particularly lame? Primarily it’s the doubling up of verb structures to express … Read More
Yes, it’s time to return to the shall wars. Thanks to the article by Lori Johnson that I discuss in this post, I’d now like to consider a court opinion that I overlooked when it first appeared. I’m referring to Lubbock County Water Control & Improvement Dist. v. Church & Akin, L.L.C., 442 S.W.3d 297 (Tex. 2014) (PDF here). The Court Opinion … Read More
