Defined Terms

Here’s something I tweeted this week: Tonight's question: What acronym have you seen used in a contract as the defined term for that contract? Off the top of my head, I recall having seen NDA, MSA, and CRADA. (I'm not endorsing this practice!) — Ken Adams (@AdamsDrafting) September 22, 2020 Here are the examples people submitted in response, plus others … Read More

It’s worse than pointless to enumerate the elements in a definition section: it clutters up the works. The elements are in alphabetical order. That by itself is enough of an organizational framework. Nevertheless, some people enumerate the elements in a definition section. The normal way would be to have the first element be, say, section 14.1 of article 14. But … Read More

I’ve spent some quality time lately with definitions of the defined term Event of Default. And I’ve seen some strange things. Here are three examples: enjoy! Here it seems as if the definition contains the defined term: The example below is basically the same, except the defined-term parenthetical is shifted earlier in the sentence, without making any more sense: An … Read More

Today I tweeted this image: The highlighted portion is of interest because the definition (The standstill period) is the same as the defined term (the “Standstill Period”). That doesn’t make sense: the whole point of defined terms is that they allow you to express a longer concept more concisely and consistently than you would otherwise. If the defined term is … Read More

  Here are two autonomous definitions: “Salvage” is cargo which has been damaged, alleged to be damaged, refused or undeliverable that has been sold, disposed of or turned over to a competent salvage agent for selling after proper On–Hand notice has been given. “Confidential Information” is any information that … Both use is as the definitional verb. That’s unorthodox. That’s … Read More

If you ever find me on the floor in the fetus position, gibbering softly, it will be because nonsense of the following sort has finally got to me. I’ve long mocked using individually a “Party” and collectively the “Parties” when creating the unnecessary defined term Party. I had suspected that there was potential for all sorts of other mischief featuring … Read More

A tipster told me about this article in the Economist. It concerns arbitration of a dispute over credit-default-swaps documentation. I’m not clear on the details, but here’s the gist of it: A contract used the defined term “Obligations” to mean an entity’s bonds. But in one crucial provision, the contract used the word “obligations,” without the initial capital. The arbitration … Read More

You might recall this post from last October, when I managed to come up with a contract extract showing how using the dreaded defined term this Agreement might help avoid confusion, assuming you’re really, really incompetent. Well, thanks to an informant buried in the contracts deep state, I now bring you something comparable, the image at the top of this … Read More