Table of Contents of
A Manual of Style for Contract Drafting (4th ed. 2017),
Marked to Show Changes from the Third Edition
CONTENTS
List of Tables .................................................................................................................................. xxi
List of Samples ............................................................................................................................. xxiii
List of Figures ................................................................................................................................ xxv
Foreword ..................................................................................................................................... xxvii
Preface ......................................................................................................................................... xxix
Introduction ............................................................................................................................... xxxiii
CHAPTER 1 The Characteristics of Optimal Contract Language ..................................................... 1
Contract Language Should Be Clear ................................................................................................. 1
Omit Archaisms ................................................................................................................... 1
Omit Problematic Terms of Art ........................................................................................... 2
Use Standard English .......................................................................................................... 4
The Myth of “Tested” Contract Language
Contract Language Should Be Precise .............................................................................................. 5
Contract Language Should Omit Redundancy ................................................................................. 5
Limit the Use of Strings ....................................................................................................... 6
Reject Needless Elaboration ............................................................................................... 7
Contract Language Shouldn’t Seek to Explain, Tell a Story, or Persuade ............................................................................................................................... 8
Contract Language Should Omit Rhetorical Emphasis
Contract Language Should Omit Repetition .................................................................................... 9
Contract Language Should Employ Usages Consistently ................................................................. 9
CHAPTER 2 The Front of the Contract........................................................................................... 11
The Title ......................................................................................................................................... 11
The Introductory Clause ................................................................................................................. 13
2
“Know All Men by These Presents” ................................................................................... 13
Format ............................................................................................................................... 13
Reference to the Type of Agreement ............................................................................... 13
What Verb to Use.............................................................................................................. 14
Date ................................................................................................................................... 14
“Between” Versus “Among” ............................................................................................. 18
Identifying the Parties ....................................................................................................... 18
The Order of the Parties ................................................................................................... 19
Having a Parent Company Enter into a Contract on Behalf of an Affiliate ....................... 19
Parties with a Limited Role ............................................................................................... 20
Referring to Lists of Parties ............................................................................................... 20
Describing the Parties ....................................................................................................... 21
Defined Terms for Party Names ........................................................................................ 24
The Defined Term “This Agreement” ................................................................................ 30
Recitals ........................................................................................................................................... 30
Function ............................................................................................................................ 30
Giving the Recitals a Heading ............................................................................................ 32
Enumeration ..................................................................................................................... 32
Use Simple Narrative Prose .............................................................................................. 32
What Verb to Use in Purpose Recitals .............................................................................. 33
Premature Recital References to the Agreement ............................................................. 33
Incorporation by Reference .............................................................................................. 34
“True and Correct” ............................................................................................................ 34
Defined Terms in the Recitals ........................................................................................... 35
The Lead-In..................................................................................................................................... 35
Wording ............................................................................................................................ 35
Consideration .................................................................................................................... 36
Giving a Heading to the Body of the Contract .................................................................. 41
Cover Sheet, Table of Contents, and Index
of Defined Terms............................................................................................................................ 42
3
CHAPTER 3 Categories of Contract Language ............................................................................... 43
PreliminaryGeneral Considerations ............................................................................................... 47
Use the Third Person ......................................................................................................... 47
Use the Active Voice Unless the Passive Voice Is Appropriate ......................................... 48
Throat-Clearing ................................................................................................................. 50
Consolidating Deal Points ................................................................................................. 51
Language of Agreement ................................................................................................................. 51
Language of Performance .............................................................................................................. 51
Use of “Hereby” in Language of Performance .................................................................. 52
Problematic Usages .......................................................................................................... 53
Actions That Don’t Work in Language of Performance .................................................... 54
Indicating Absence of Performance .................................................................................. 54
Future Performance .......................................................................................................... 54
In Buying and Selling ......................................................................................................... 54
For Performance of Services ............................................................................................. 55
Advantages of Granting Language .................................................................................... 55
Language of Obligation .................................................................................................................. 57
Language of Obligation Imposed on the Subject of a Sentence ....................................... 57
Language of Obligation Imposed on Someone Other Than
the Subject of a Sentence ................................................................................................. 66
Imposing Impossible Obligations ...................................................................................... 71
Imposing Obligations to Stop Something from Happening .............................................. 72
Obligations—Some Related Terminology ......................................................................... 72
Language of Discretion .................................................................................................................. 75
Using “May” to Convey Discretion ................................................................................... 76
Be Explicit as to Whether Discretion Is Limited ................................................................ 77
The Ambiguity Inherent in “May . . . … Only” ................................................................... 78
Using “May” to Convey Possibility .................................................................................... 79
“May Require” ................................................................................................................... 80
May Request ..................................................................................................................... 80
Don’t Use “At Its Sole Discretion” with “May”
“May” and the Timing and Frequency of Permitted Actions ............................................. 81
4
“Hereby Grants . . . … the Right To” .................................................................................. 85
When Exercising Discretion Requires Cooperation .......................................................... 86
“Using Hereby Waives the Right To to Express Discretion ............................................... 86
Is Entitled To” .................................................................................................................... 86
“Is Not Required To”.......................................................................................................... 87
Is Not Prohibited From ...................................................................................................... 89
Language of Prohibition ................................................................................................................. 89
“Shall Not” ......................................................................................................................... 89
“Don’t Use May Not” ........................................................................................................ 90
“Is Not Entitled To” ........................................................................................................... 90
Don’t Use “Shall Refrain” .................................................................................................. 91
Don’t Use Hereby Waives the Right To to Express Prohibition ........................................ 91
Other Suboptimal Usages ................................................................................................. 92
Collective Nouns ............................................................................................................... 92
Nor Shall ............................................................................................................................ 93
Prohibition by Way of an Exception to Language of
Discretion or Obligation .................................................................................................... 93
Choosing Between Discretion and Prohibition for an Action Subject to a Condition
Language of Policy ......................................................................................................................... 94
Verbs in Language of Policy .............................................................................................. 94
Passive-TypeBuried-Actor Policies .................................................................................... 95
Use of the Passive Voice ................................................................................................... 96
Expressing Conditions .................................................................................................................... 96
Conditional Clauses ........................................................................................................... 97
Language of Policy Used to Express Conditions .............................................................. 103
Language of Obligation Used to Express Conditions ...................................................... 104
A Condition Doesn’t Make Sense If It Can Be Ignored .................................................... 105
A Condition Might Not Be the Only Condition ................................................................ 106
Language of Declaration .............................................................................................................. 106
Statements of Fact—Using “Represents and Warrants” ................................................ 107
Statements of Fact—Using States and Addressing Remedies Directly........................... 113
Statements of Fact—Alternatives To .............................................................................. 116
5
Statements of Fact—Some Related Terminology ........................................................... 116
Acknowledgments........................................................................................................... 116
Language of Belief
Language of Intention .................................................................................................................. 117
Language of Recommendation .................................................................................................... 119
“Shall” and “May” in Restrictive Relative Clauses ....................................................................... 120
Use of Shall ..................................................................................................................... 120
Use of May ...................................................................................................................... 121
Not a Category of Contract Language: Assumptions ................................................................... 121
Selecting Which Category of Contract Language to Use ............................................................. 122
Amending a Contract ...................................................................................................... 122
Giving Notice ................................................................................................................... 122
Unreasonably Withholding Consent ............................................................................... 123
Stating How a Court Is to Conduct Itself ......................................................................... 123
Arbitration Provision ....................................................................................................... 125
CHAPTER 4 Layout ....................................................................................................................... 127
The MSCD Enumeration Schemes ................................................................................................ 127
The Components of the Body of the Contract ............................................................................. 127
Articles ............................................................................................................................ 127
Sections ........................................................................................................................... 130
Subsections ..................................................................................................................... 131
Enumerated Clauses ....................................................................................................... 132
The MSCD First-Line-Indent Enumeration Scheme ........................................................ 136
The MSCD Hanging-Indent Enumeration Scheme .......................................................... 137
Adopting an MSCD Enumeration Scheme ...................................................................... 138
Don’t Make Blocks of Text Too Long or Too Short ......................................................... 138
Using a Two-Column Format .......................................................................................... 140
Arranging Provisions in the Body of the Contract........................................................................ 141
Division ............................................................................................................................ 142
Classification ................................................................................................................... 142
Sequence ......................................................................................................................... 142
6
Frontloading and Backending ...................................................................................................... 143
Cross-References ......................................................................................................................... 144
Function .......................................................................................................................... 144
Wording .......................................................................................................................... 145
Updating.......................................................................................................................... 146
Headers and Footers .................................................................................................................... 147
Page Numbers ................................................................................................................. 147
Other Information ........................................................................................................... 148
CHAPTER 5 The Back of the Contract .......................................................................................... 149
The Concluding Clause ................................................................................................................. 149
The Two Kinds of Concluding Clause .............................................................................. 149
Use “Signing” Rather Than “ Instead of Executing and Delivering” ................................ 150
Which Tense to Use ........................................................................................................ 151
Using an “As Of” Date in the Concluding Clause ............................................................. 151
Traditional Concluding Clauses ....................................................................................... 152
Avoiding Signature-Page Mix-Ups................................................................................... 153
The Signature Blocks .................................................................................................................... 153
Format ............................................................................................................................. 153
Read before Signing ........................................................................................................ 155
Dealing with Undated Signatures ................................................................................... 156
Parties with Limited Roles............................................................................................... 156
Seals and Deeds .............................................................................................................. 156
Witnessing Signatures ..................................................................................................... 159
Notarizing Signatures ...................................................................................................... 159
Signing a Contract Electronically ..................................................................................... 159
Having Legal Counsel Sign ............................................................................................... 160
Consents ....................................................................................................................................... 160
Blank Space After the Body of the Contract ................................................................................ 160
Giving the Signature Page an Identifying Notation...................................................................... 161
Attachments ................................................................................................................................. 161
Kinds of Attachments ...................................................................................................... 161
7
Placement of Attachments ............................................................................................. 161
References to Attachments ............................................................................................ 162
Enumerating Attachments .............................................................................................. 162
Exhibits ............................................................................................................................ 163
Schedules ........................................................................................................................ 163
Attachments as Part of a Contract .................................................................................. 165
Virtual Attachments ........................................................................................................ 165
CHAPTER 6 Defined Terms .......................................................................................................... 167
Purpose ........................................................................................................................................ 167
The Nature of Defined Terms ...................................................................................................... 167
Abbreviations as Defined Terms .................................................................................................. 168
Selecting Defined Terms .............................................................................................................. 168
Circular Definitions....................................................................................................................... 169
Overlapping Definitions ............................................................................................................... 170
Types of Definitions ..................................................................................................................... 170
Autonomous Definitions ................................................................................................. 170
Integrated Definitions ..................................................................................................... 174
Which Type of Definition to Use .................................................................................................. 178
The Definition Section .................................................................................................................. 178
Versus Defining Terms On Site ........................................................................................ 178
Where to Place the Definition Section............................................................................ 179
The Two-Column Definition Section ............................................................................... 180
Cross-References to Definitions ................................................................................................... 180
The Index of Definitions .................................................................................................. 180
Referring to the Definition Section ................................................................................. 181
If a Defined Term Is Used Before It Is Defined ................................................................ 181
Use Defined Terms Efficiently ...................................................................................................... 182
Looking to Dictionaries for Definitions ........................................................................................ 183
CHAPTER 7 Sources of Uncertainty Uncertain Meaning in Contract Language ........................ 185
Ambiguity ..................................................................................................................................... 185
8
Lexical Ambiguity ............................................................................................................ 186
Antecedent Ambiguity .................................................................................................... 187
Undue Generality
Contract-Reference Ambiguity ....................................................................................... 188
Failure to Be Sufficiently Specific ................................................................................................. 189
Mistake......................................................................................................................................... 190
Conflict ......................................................................................................................................... 190
Failure to Address an Issue .......................................................................................................... 190
Vagueness .................................................................................................................................... 191
Limiting the Risk in Vagueness ........................................................................................ 191
Gradations of Vagueness ................................................................................................ 192
Blurred Boundaries ...................................................................................................................... 192
CHAPTER 8 “Reasonable Efforts” and Its Variants ..................................................................... 193
Confusion over Efforts (and Endeavours) .................................................................................... 193
The Function of “Efforts” Provisions
The Spectrum of “Efforts” Standards ........................................................................................... 193
What the Different “A Variety of Efforts” Standards ................................................................... 194
What People Think Efforts Standards Mean ................................................................................ 195
The Semantics of “What Efforts Standards Actually Mean .......................................................... 195
Best Efforts” and “Reasonable Efforts”
The Semantics of Other “Efforts” Standards
The Semantics of “All Is Not More Onerous Than Reasonable Efforts” ......................... 195
All Doesn’t Affect Meaning ............................................................................................. 198
Commercially Doesn’t Affect Meaning ........................................................................... 198
Reasonable Efforts Doesn’t Require Moderation ........................................................... 198
Caselaw and the UCC on the Meaning of Different Efforts Standards ........................................ 198
U.S. Caselaw .................................................................................................................... 199
English Caselaw ............................................................................................................... 204
Canadian Caselaw ........................................................................................................... 205
Other Caselaw ................................................................................................................. 205
Misleading Commentary on Caselaw ............................................................................. 206
The Uniform Commercial Code....................................................................................... 206
9
Enforceability of “How to Draft Efforts” Provisions ..................................................................... 207
Determining Whether a Party Has MadeWhenever Possible, Be Precise Instead of Vague207
Use Only Reasonable Efforts ........................................................................................... 207
Standard Consider Using Reasonable Efforts Instead of Reasonable Endeavours ......... 208
Set Standards for Measuring Performance .................................................................... 208
Establishing a Benchmark
Narrowly DirectedEliminate Clutter and Inconsistency .................................................. 209
Don’t Use More than One Efforts Standard in a Contract .............................................. 210
Use Only “Reasonable Efforts”
Defining What “Reasonable Efforts” Means
The Core Definition
Carve-Outs
The Wording of “Reasonable Efforts” Provisions ............................................................ 210
CHAPTER 9 Material” and “Material Adverse Change” ............................................................. 213
“Material” .................................................................................................................................... 213
Vagueness ....................................................................................................................... 213
A Source of Ambiguity .................................................................................................... 214
How “Material” Is Used .................................................................................................. 214
Avoiding Ambiguity ......................................................................................................... 215
Defining “Material” ......................................................................................................... 216
Defining “Significant”
UsingLimiting Qualifications Relating to Significance ..................................................... 217
Basic Protection
“Which Noun to Modify .................................................................................................. 218
Material Adverse Change” ........................................................................................................... 219
Using MACMaterial Adverse Change .............................................................................. 219
Defining MACMaterial Adverse Change ......................................................................... 226
CHAPTERCHAPTER 10 References to Time ............................................................................. 239
Dates ............................................................................................................................................ 239
Format ............................................................................................................................. 239
Date and Day .................................................................................................................. 240
The Date That Is .............................................................................................................. 240
10
The Date Notified ............................................................................................................ 241
Points in Time............................................................................................................................... 241
The Prepositions Used to Refer to a Day ........................................................................ 241
When in a Given Day a Point in Time Occurs .................................................................. 243
Alternatives to Uncertainty
SpecifyingStating the Time of Day .................................................................................. 243
Time Zones
Prepositions to Use to Refer to Occurrence of an Event ................................................ 246
Periods of Time ............................................................................................................................ 247
Forward-RunningLooking Periods of Time ...................................................................... 247
Backward-Looking Periods of Time ................................................................................. 247
Backward-Running Periods ofDon’t Use Confusing Points in Time ................................. 248
Don’t Use “Within” ......................................................................................................... 248
Which Unit of Time to Use .............................................................................................. 249
One Year and a Day ........................................................................................................ 250
Using “On” to Denote a Day-Long Period of Time .......................................................... 250
Another Ambiguity Relating to Periods of Time
Using a Time of Day for the End of a Period of Time ...................................................... 250
Confusion Resulting from Referring to a Point in Time
Instead of a Period in Time ............................................................................................. 251
During the Period ............................................................................................................ 251
Will Have Plus a Period of Time ...................................................................................... 251
Apportioning Quantities perPer Unit of Time .............................................................................. 252
The Possible Meanings of Certain Units of Time ............................................................ 252
Handling Short Periods ................................................................................................... 253
Apportioning Units of Time ............................................................................................. 253
Other Standards for Speed, Frequency, and Duration ................................................................ 254
Promptly, Immediately .................................................................................................... 254
At Any Time ..................................................................................................................... 257
From Time to Time and On One or More Occasions ....................................................... 257
At All Times ..................................................................................................................... 258
So Long As ....................................................................................................................... 259
11
Periodically ...................................................................................................................... 259
Avoiding Confusion by Adding a Time Component ..................................................................... 259
CHAPTER 11 Ambiguity of the Part Versus the Whole .............................................................. 261
Whether Singular Means Plural ................................................................................................... 261
The Role of Any ............................................................................................................... 262
A Balanced Approach ...................................................................................................... 263
Plural Nouns ................................................................................................................................. 263
Subject Ambiguity
Direct-Object Ambiguity ................................................................................................. 264
Subject-and-Direct-Object Ambiguity ............................................................................. 265
“And” ............................................................................................................................................ 265
Subject Ambiguity
Direct-Object Ambiguity.................................................................................................. 265
Direct-Object Ambiguity ................................................................................................. 266
Subject-and-Direct-Object Ambiguity ............................................................................. 267
Multiple Verb Phrases ..................................................................................................... 267
Ambiguity of Direct Object Plus Objects of Preposition ................................................. 268
The Effect of Adjectives .................................................................................................. 268
“Every X and Y” and “Each X and Y” ................................................................................ 270
Adding Contingency to “And” ......................................................................................... 270
“Or” .............................................................................................................................................. 271
Background ..................................................................................................................... 271
As Applied to Contracts .................................................................................................. 272
When One of a Series Linked by Or Is Modified by a Conditional Clause ....................... 274
Plural Nouns .................................................................................................................... 276
The Effect of Adjectives .................................................................................................. 277
“And/Or” ...................................................................................................................................... 279
“And . . . … Or” .............................................................................................................................. 279
“Using And Instead of Or, and Vice Versa .................................................................................... 281
Every,” “, Each,”, All, and “Any” ................................................................................................... 281
A Case Study ................................................................................................................................. 283
12
Background ..................................................................................................................... 284
The Third Circuit’s Analysis ............................................................................................. 284
What Are the Possible Meanings? .................................................................................. 285
Is CUNA’s Meaning Reasonable? .................................................................................... 286
Is Meyer’s Meaning Reasonable? ................................................................................... 286
Mixing Analyses of Different Meanings .......................................................................... 287
Practical Considerations ............................................................................................................... 288
The Risks ......................................................................................................................... 288
Whether to Eliminate Alternative Meanings .................................................................. 288
Drafting to Avoid Alternative Meanings ......................................................................... 290
CHAPTER 12 Syntactic Ambiguity ............................................................................................... 291
Modifiers ...................................................................................................................................... 291
Modifiers Preceding or Trailing Two or More Nouns ..................................................... 291
Modifiers Occurring Betweenbetween Two or More Nouns ......................................... 294
Squinting Modifiers ......................................................................................................... 295
Modifiers of Uncertain Length ........................................................................................ 295
Poorly Placed Modifiers .................................................................................................. 296
Opening and Closing Modifiers ....................................................................................... 296
Closing Modifiers with Offsetting Commas .................................................................... 298
“That” and “Which” ..................................................................................................................... 300
Background ..................................................................................................................... 300
Current Usage ................................................................................................................. 300
Recommendation ............................................................................................................ 301
The Serial Comma ........................................................................................................................ 302
Inadvertent Combined Elements .................................................................................... 302
Inadvertent Apposition ................................................................................................... 302
Inadvertent Object of Preposition .................................................................................. 303
Staying Out of Trouble .................................................................................................... 304
Avoiding Syntactic Ambiguity by Restructuring ........................................................................... 304
13
CHAPTER 13 Selected Usages ...................................................................................................... 307
“Action or Proceeding” ................................................................................................................. 307
“Affiliate” and “Subsidiary”
“Actively ....................................................................................................................................... 307
Actual, Actually ............................................................................................................................ 307
Affirmatively, Affirmative............................................................................................................. 308
Allonge ......................................................................................................................................... 309
Also, In Addition ........................................................................................................................... 309
Among Other Things .................................................................................................................... 309
Amongst, Whilst ........................................................................................................................... 310
Anniversary” ................................................................................................................................. 310
“Annual Meeting” ........................................................................................................................ 310
“Anyone ........................................................................................................................................ 311
Applicable” ................................................................................................................................... 311
“Applicable” Plus Noun ................................................................................................... 311
The Verb “To Be” Plus “Applicable” ................................................................................ 312
“As Applicable” ................................................................................................................ 312
“Arising Out Of or Relating To” .................................................................................................... 312
Implications ..................................................................................................................... 312
An Alternative Approach ................................................................................................. 313
“As Amended” .............................................................................................................................. 314
“As Consideration” ....................................................................................................................... 315
“As Liquidated Damages and Not Asas a Penalty” ...................................................................... 316
“As the Case May Be”................................................................................................................... 317
“At Least One of X and Y .............................................................................................................. 318
The Court’s Analysis ........................................................................................................ 318
Critique............................................................................................................................ 319
Recommendation ............................................................................................................ 320
Attorn” ......................................................................................................................................... 321
“Automatically” ............................................................................................................................ 322
“Basis” (Including “Timely”)) ........................................................................................................ 322
“Because” ..................................................................................................................................... 323
14
“Belief ........................................................................................................................................... 323
Between or Among....................................................................................................................... 324
Books and Records” ..................................................................................................................... 324
“Buy”, Purchase ............................................................................................................................ 325
“Bylaws” ....................................................................................................................................... 325
“Certain” ...................................................................................................................................... 326
“Certify” ........................................................................................................................................ 326
“Change in Control” or “, Change of Control”? ............................................................................ 326
“Closing ........................................................................................................................................ 326
Gerundial Noun ............................................................................................................... 327
Other Forms .................................................................................................................... 327
Making the Right Choice ................................................................................................. 327
Cognizant ..................................................................................................................................... 328
Competitive” ................................................................................................................................ 328
“Complete and Accurate”............................................................................................................. 329
“Consequential Damages” ........................................................................................................... 330
“Terminology .................................................................................................................. 330
Problems ......................................................................................................................... 331
Alternatives ..................................................................................................................... 331
Lost Profits ...................................................................................................................... 332
Continuously, Continuous ............................................................................................................ 333
Contractual” ................................................................................................................................. 334
“Costs and Expenses” ................................................................................................................... 334
“Coupled with an Interest” ........................................................................................................... 335
“Curing Breach ............................................................................................................................. 336
Generally ......................................................................................................................... 336
Amenable to Cure ........................................................................................................... 337
Deem” .......................................................................................................................................... 337
Making a Release Automatic .......................................................................................... 338
“Default” ...................................................................................................................................... 338
“Default or Event of Default” .......................................................................................... 338
15
“Has Occurred and Is Continuing” ................................................................................... 339
“Directly ....................................................................................................................................... 340
Disclaim” ...................................................................................................................................... 340
“Due or to Become Due” .............................................................................................................. 341
“Duly” ........................................................................................................................................... 341
“During . . .… Employment” .......................................................................................................... 342
“During the Term of This Agreement” ......................................................................................... 342
“End” ............................................................................................................................................ 343
“Especially”, Particularly, In Particular......................................................................................... 343
“Etc. .............................................................................................................................................. 344
Et Seq. .......................................................................................................................................... 344
Execute and Deliver” .................................................................................................................... 345
“Fails To ........................................................................................................................................ 346
Faithfully ...................................................................................................................................... 347
Fax” .............................................................................................................................................. 347
“Fixed Fee” ................................................................................................................................... 348
“For Anyany Reason or No Reason” ............................................................................................. 348
“Force and Effect” ........................................................................................................................ 349
“Formal” and “, Formally” ............................................................................................................ 349
“Form and Substance” ................................................................................................................. 350
“For the Avoidance of Doubt” ...................................................................................................... 350
“Fraud” and “Intentional Misrepresentation” ............................................................................. 352
“From the Beginning of Time” ...................................................................................................... 353
“Full-Time” ................................................................................................................................... 353
“Guarantee” and “, Guaranty” ..................................................................................................... 353
“Guarantee” (the (The Verb) as Term of Art ................................................................................ 354
“Guarantees That” ....................................................................................................................... 355
“Here-”- and “There-”- Words ...................................................................................................... 355
“In Accordance With” and “, According To” ................................................................................. 356
“Including” and “, Includes” ......................................................................................................... 356
A Source of Uncertainty .................................................................................................. 356
16
An Unhelpful Fix .............................................................................................................. 357
Avoiding Uncertainty ...................................................................................................... 359
Putting the General Word at the End ............................................................................ 360
Commentary in Favor of But Not Limited To .................................................................. 360
Related Problematic Usages .......................................................................................... 361
“Incorporated by Reference”........................................................................................................ 362
“Indefinitely” and “, Perpetually” ................................................................................................. 363
“Indemnify” .................................................................................................................................. 363
Function .......................................................................................................................... 363
Whether to Say “Shall Indemnify, Not Hereby Indemnifies” or “Shall Indemnify”.......... 366
“Don’t Use Indemnify and Hold Harmless” ..................................................................... 366
“Don’t Use Shall Indemnify” and Keep Indemnified........................................................ 368
Defend Is Inadequate ...................................................................................................... 368
Prepositions .................................................................................................................... 368
Indemnify as a Term of Art.............................................................................................. 369
“Indenture” .................................................................................................................................. 370
“In Other Words” ......................................................................................................................... 370
“In Particular”
“Inure ........................................................................................................................................... 370
It Being Understood” .................................................................................................................... 371
“Joinder ........................................................................................................................................ 372
Joint and Several”......................................................................................................................... 372
Theory ............................................................................................................................. 373
Practice ........................................................................................................................... 373
Procedural Implications .................................................................................................. 374
What Should the Drafter Do? ......................................................................................... 374
Relevance of Statutes ..................................................................................................... 374
“Knowledge” ................................................................................................................................ 375
The Function of Knowledge Qualifications ..................................................................... 375
Defining Knowledge ........................................................................................................ 376
Don’t Use Is Unaware Of................................................................................................. 377
Latinisms ...................................................................................................................................... 378
17
“Legal Fees Instead of Attorneys’ Fees ........................................................................................ 378
Likely” ........................................................................................................................................... 379
“Look To ....................................................................................................................................... 380
Lump Sum” ................................................................................................................................... 380
“Merely” and “, Mere” ................................................................................................................. 381
Money—Stating Amounts Of ....................................................................................................... 381
Words andUse Only Digits .............................................................................................. 381
Decimal Fractions ............................................................................................................ 381
Very Large Amounts ........................................................................................................ 382
Currencies ....................................................................................................................... 382
Provision Specifying Drafting Conventions
“Moral Turpitude” ........................................................................................................................ 383
Background ..................................................................................................................... 383
What Crime?. .................................................................................................................. 384
Involving? What Offense? ............................................................................................... 384
Other Criteria? ................................................................................................................ 385
At What Procedural Posture?Stage? ............................................................................... 385
Which Jurisdiction? ......................................................................................................... 385
Doubling Up? .................................................................................................................. 386
Recommendation ............................................................................................................ 386
“Mutatis Mutandis” ..................................................................................................................... 386
“Mutual” and “, Mutually” ........................................................................................................... 387
“Negligence” and “, Gross Negligence” ....................................................................................... 388
How the Terms Are Used ................................................................................................ 388
Confused Terminology .................................................................................................... 388
Recommendations .......................................................................................................... 389
A Sample Provision ......................................................................................................... 390
“No Later [or Earlier, More, or Less] Than ................................................................................... 391
Notice” ......................................................................................................................................... 392
Notice and “Prior Notice” ................................................................................................ 392
“Termination with Prior Notice”— ................................................................................. 393
Notice—Using an Apostrophe with Periods of Time ...................................................... 393
18
“Notwithstanding,” “, Subject To,” and “, Except as Provided In” ............................................... 394
“Notwithstanding” .......................................................................................................... 394
“Subject To” .................................................................................................................... 395
“Except as Provided In” ................................................................................................... 396
Confusing Interplay ......................................................................................................... 396
Eliminating Nullified Provisions ...................................................................................... 396
“Novation” ................................................................................................................................... 396
“Only” ........................................................................................................................................... 397
“On the One Hand . . . … On the Other Hand” .............................................................................. 397
To Indicate Which Conjunction Has Scope Over the Other ............................................ 398
To Divide a List into Two Categories ............................................................................... 398
Used Unnecessarily ......................................................................................................... 398
Parentheses ................................................................................................................................. 399
“Function ......................................................................................................................... 399
Parentheses Within Words ............................................................................................. 400
Party” as an Adjective .................................................................................................................. 400
Percentages .................................................................................................................................. 400
“Personal Delivery” ...................................................................................................................... 401
“Personnel .................................................................................................................................... 401
Prevailing Party” .......................................................................................................................... 402
“Product” and “, Units of the Product” ........................................................................................ 403
“Promptly” and “Immediately”
“Promptly”
“Immediately”
The Semantics
Recommendation
“Proprietary” ................................................................................................................................ 403
“Provided That” ............................................................................................................................ 403
“Provision ..................................................................................................................................... 405
Reasonable” and “, Reasonably” .................................................................................................. 405
Reasonableness and Good Faith .................................................................................................. 406
Whether to Use a Reasonableness Standard or a Good-Faith Standard ........................ 406
Using Both Standards Together ...................................................................................... 407
19
“Regard Shall Be Had To .............................................................................................................. 408
Remediate” .................................................................................................................................. 408
“Remit” and “, Remittance” ......................................................................................................... 408
“Respective” and “, Respectively” ................................................................................................ 409
“Respective” .................................................................................................................... 409
“Respectively” ................................................................................................................. 410
“Rightfully” and “, Rightful” ......................................................................................................... 411
“Right, Title, and Interest ............................................................................................................. 411
Said” Used as a Pointing Word .................................................................................................... 412
“Same” Used as a Pronoun .......................................................................................................... 413
“Satisfactory” ............................................................................................................................... 413
“Shareholder” or “Stockholder”? ................................................................................................. 414
“Shareholders Agreement” .......................................................................................................... 414
“Signatory” ................................................................................................................................... 415
“Silent On ..................................................................................................................................... 415
Sole” and “, Exclusive” .................................................................................................................. 415
“Sole” and “, Exclusive” in Licensing ............................................................................... 415
“Sole and Exclusive” ........................................................................................................ 416
“Solicit” ......................................................................................................................................... 416
“Specific” ...................................................................................................................................... 417
“Substantial” and “Substantially”
“Spouse ........................................................................................................................................ 417
Subrogation .................................................................................................................................. 417
Such As” ....................................................................................................................................... 418
“Such” Used as a Pointing Word .................................................................................................. 419
“Suffer .......................................................................................................................................... 420
Intransitive ...................................................................................................................... 420
Transitive ......................................................................................................................... 421
Survival” ....................................................................................................................................... 421
Survival of Claims ............................................................................................................ 421
Survival of Provisions ...................................................................................................... 421
Survival of RepresentationsStatements of Fact .............................................................. 422
20
“Termination” and “Expiration”
What to Use in Termination Provisions, Expiration...................................................................... 422
ReferringWhat to Use in Termination Provisions ........................................................... 422
“Referring to Termination Provisions ............................................................................. 423
Termination for Convenience” ..................................................................................................... 424
The Implications of “Termination for Convenience” ....................................................... 424
Alternative Language ...................................................................................................... 425
“Terms and Conditions” ............................................................................................................... 426
“That Certain” .............................................................................................................................. 426
“The Earlier [or Later, Greater, or Lesser] of X and Y” ................................................................. 426
“There Can Be No Assurance That ............................................................................................... 427
Therefor” ...................................................................................................................................... 427
“Thing ........................................................................................................................................... 428
Third Party” .................................................................................................................................. 428
“Throughout the Universe ............................................................................................................ 429
“Time Is of the Essence” ............................................................................................................... 429
“Together With” and “, As Well As” ............................................................................................. 431
“To the Extent Permitted by Law” ................................................................................................ 431
Trademarks—References To ........................................................................................................ 432
All Capitals or Initial Capitals? ......................................................................................... 432
Registration Symbol or No Registration Symbol? ........................................................... 433
Relationship to Trademark Guidelines ........................................................................... 434
“Unless and Until” ........................................................................................................................ 434
“Unless the Context Otherwise Requires” .................................................................................... 434
“Unless the Parties Agree Otherwise” .......................................................................................... 435
“Utmost ........................................................................................................................................ 435
Very” ............................................................................................................................................ 435
Virgule, Also Known as the Forward Slash ................................................................................... 435
“Voluntarily, Involuntarily ............................................................................................................ 436
Warrant,” “, Warrant Certificate,” and “, Warrant Agreement” ................................................. 436
“Warranty” and, the Verb “Warrant” .......................................................................................... 437
Background ..................................................................................................................... 437
21
Definition of “Warranty” and “To Warrant”
Using the Verb “Warrant ................................................................................................ 437
Using the Verb Warrant” to Introduce a Statement of Fact ........................................... 437
Don’t Use the Verb “Warrant” to Introduce an Obligation ............................................ 438
Using the Word “Warranty” ........................................................................................... 438
Whether Singular Means Plural
The Role of “Any”
A Balanced Approach
“Well and Truly............................................................................................................................. 439
Willful” and “, Willfully” ............................................................................................................... 439
“Without Limiting the Generality of the Foregoing” .................................................................... 439
Without Prejudice ........................................................................................................................ 441
Workmanlike ................................................................................................................................ 441
CHAPTER 14 Numbers and Formulas .......................................................................................... 443
Words or Digits ............................................................................................................................ 443
Why Words and Digits? ................................................................................................... 443
Problems ......................................................................................................................... 443
Using First Words, Then Digits ........................................................................................ 445
Using Only Digits for All Numbers ................................................................................... 445
Formulas ...................................................................................................................................... 445
Using Prose ..................................................................................................................... 446
Using Mathematical Equations ....................................................................................... 452
Consecutive Ranges of Numbers ................................................................................................. 452
Distinguishing Betweenbetween “Stepped Rates” and “Shifting Flat Rates”................. 452
Gaps and Overlaps .......................................................................................................... 454
Chapter 15 Provisions Specifying Drafting Conventions
Provisions That Might Be Moderately Useful ............................................................................... 458
Provisions ThatThese Are Unnecessary, or Should Be Redundant .............................................. 458
These Overreach by Trying to Create Order ................................................................................ 459
22
CHAPTER 16 Typography ............................................................................................................. 461
Fonts............................................................................................................................................. 461
The Usual Suspects ......................................................................................................... 461
Constraints on Choice ..................................................................................................... 463
Serif and Sans Serif.......................................................................................................... 464
Justification .................................................................................................................................. 464
Emphasis ...................................................................................................................................... 465
Emphasizing Names and Article Headings ...................................................................... 466
Emphasizing Section Headings and Defined Terms ........................................................ 466
What Not to Emphasize .................................................................................................. 467
Emphasizing Provisions ................................................................................................... 467
Font Size ....................................................................................................................................... 469
Characters perPer Line ................................................................................................................. 470
Line Spacing ................................................................................................................................. 471
Space After Punctuation .............................................................................................................. 471
“Curly” and “Straight” Quotation Marks and Apostrophes ......................................................... 472
First-Line Indents ......................................................................................................................... 473
Design Embellishments ................................................................................................................ 474
CHAPTER 17 Drafting as Writing ................................................................................................. 475
Don’t Make Sentences Too Long ................................................................................................. 475
Keep Subject, Verb, and Object Close Together .......................................................................... 476
Don’t Bury Verbs .......................................................................................................................... 477
Avoid Gender-Specific Language ................................................................................................. 478
Avoid Lawyerisms
Avoid OtherDon’t Use Wordy Phrases ......................................................................................... 479
“To the Extent That” ....................................................................................................... 480
“The Fact That” ............................................................................................................... 480
“There Is” and “There Is and There Are” ......................................................................... 481
With Respect To .............................................................................................................. 481
Use Possessives ............................................................................................................................ 482
Don’t Overuse Initial Capitals ...................................................................................................... 482
23
The Extraneous “The” .................................................................................................................. 483
Don’t Use “(s)”
Contractions ................................................................................................................................. 483
Punctuation .................................................................................................................................. 484
CHAPTER 18 Amendments .......................................................................................................... 485
Amending, or Amending and Restating ....................................................................................... 485
Title .............................................................................................................................................. 485
Introductory Clause and Recitals ................................................................................................. 486
The Lead-In................................................................................................................................... 486
Language of Performance ............................................................................................................ 486
Distinguishing Betweenbetween Amending and Supplementing ............................................................................................................... 486
Adding, Deleting, and Replacing Language .................................................................................. 487
Change Affecting Part of a Provision .............................................................................. 487
Change Affecting an Entire Provision ............................................................................. 487
Layout........................................................................................................................................... 489
CHAPTER 19 Letter Agreements ................................................................................................. 491
Function ....................................................................................................................................... 491
Components ................................................................................................................................. 491
Sender’s Address ............................................................................................................. 491
Date ................................................................................................................................. 491
Recipient’s Address ......................................................................................................... 491
Salutation ........................................................................................................................ 492
Introductory Sentence .................................................................................................... 492
Substantive Terms .......................................................................................................... 492
Closing Sentence ............................................................................................................. 492
Sender’s Signature .......................................................................................................... 492
Recipient’s Signature ...................................................................................................... 492
CHAPTER 20 Drafting Corporate Resolutions
The Title
The Lead-In
24
Recitals
Resolutions
Where to Place the Verb “Resolve”
Factual Resolutions
Suasive Resolutions
Don’t Use Language of Obligation
The Concluding Clause
Wording
What Date to Use
Counterparts
The Signature Blocks
Attachments
A Sample Written Consent, “Before” and “After”
Appendix 1 ................................................................................................................................... 495
Appendix 1-A: Before
Appendix 1-B: ...................................................................................................... Before, Annotated
..................................................................................................................................................... 496
Appendix 1-C: ......................................................................................................................... B: After
..................................................................................................................................................... 508
Appendix 2: A Model Statement of Style for Contract Drafting
Appendix 3: Changes to Second Edition
Certain Works Cited ........................................................................................................... 515
Cases Cited ........................................................................................................................ 517
Index ................................................................................................................................. 525
About the Author ............................................................................................................... 547
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