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