a substitute document in comprehensible English. Otherwise a series of
questions may be put by letter, and the replies often will have
contractual force if the document is later contested.
Contract phrases
Now it appears logical to examine the examples of favourite
contract phrases, which will help ease the way to fuller examination of
entire negotiations and contracts. A full glossary is beyond reach but in
what follows there is a listing of words and phrases that turn up in great
many documents, with comments on each one. The words and phrases are
presented in plausible contract sequence, not alphabetically.
"Whereas" Everyone's idea of how a contract begins. Some lawyers
dislike "Whereas" and use recitation clauses so marked to distinguish them
from the text in the contract. There the real issue lies; one must be
careful about mixing up recitals of history with what is actually being
agreed on. For example, it would be folly to write: "Whereas A admits
owing B $10,000..." because the admission may later haunt one,
especially if drafts are never signed and the debt be disputed. Rather
less damaging would be:
e.g. "Whereas the parties have engaged in a series of
transactions resulting in dispute over accounting between them..."
On the whole "Whereas" is acceptable, but what follows it needs
particular care.
"It is understood and agreed" On the one hand, it usually adds
nothing, because every clause in the contract is "understood and agreed" or
it would not be written into it. On the other hand, what it adds is an
implication that other clauses are not backed up by this phrase: by
including the one you exclude the other. «It is understood and agreed»
ought to be banished.
"Hereinafter" A decent enough little word doing the job of six
("Referred to later in this document"). "Hereinafter" frequently sets up
abbreviated names for the contract parties.
e.g. "Knightsbridge International Drapes and Fishmonger, Ltd
(hereinafter "Knightsbridge").
"Including Without Limitation" It is useful and at times essential
phrase. Earlier I've noted that mentioning certain things may exclude
others by implication. Thus,
e.g. "You may assign your exclusive British and Commonwealth rights"
suggests that you may not assign other rights assuming you have any. Such
pitfalls may be avoided by phrasing such as:
e.g. "You may assign any and all your rights including without
limitation your exclusive British and Commonwealth rights".
But why specify any rights if all of them are included? Psychology
is the main reason; people want specific things underscored in the
contracts, and "Including Without Limitation" indulges this
prediction.
"Assignees and Licensees" These are important words which
acceptability depends on one's point of view
"Knightsbridge, its assignees and licensees..."
suggests that Knightsbridge may hand you over to somebody else after
contracts are signed. If you yourself happen to be Knightsbridge, you
will want that particular right and should use the phrase.
"Without Prejudice" It is a classic. The British use this phrase all
by itself, leaving the reader intrigued. "Without Prejudice" to what
exactly? Americans spell it out more elaborately, but if you stick
to American way, remember "Including Without Limitation", or you may
accidentally exclude something by implication. Legal rights, for example,
are not the same thing as remedies the law offers to enforce them. Thus
the American might write:
"Without prejudice to any of my existing or future rights or
remedies..."
And this leads to another phrase.
"And/or" It is an essential barbarism. In the preceding example I've
used the disjunctive "rights or remedies". This is not always good
enough, and one may run into trouble with
"Knightsbridge or Tefal or either of them shall..."
What about both together? "Knightsbridge and Tefal", perhaps, followed by
"or either". Occasionally the alternatives become overwhelming, thus
and/or is convenient and generally accepted, although more detail
is better.
"Shall" If one says "Knightsbridge and/or Tefal shall have..." or
"will have...", legally it should make no difference in the case
you are consent in using one or the other. "Shall", however, is
stronger than "will". Going from one to another might suggest that one
obligation is stronger somehow than another. Perhaps, one's position
may determine the choice. "You shall", however is bad form.
"Understanding" It is a dangerous word. If you mean agreement
you ought to say so. If you view of affairs that there is no
agreement, "understanding" as a noun suggests the opposite or comes close
to it. .it stands, in fact, as a monument to unsatisfactory compromise.
The softness of the word conjures up pleasing images. "In accordance
with our understanding..." can be interpreted in a number of ways.
"Effect" Here is a little word which uses are
insufficiently praised. Such a phrase as "We will produce..."
is inaccurate, because the work will be subcontracted and the
promise-maker technically defaults. Somebody else does the producing. Why
not say "We will produce or cause to be produced..."? This is in fact
often said, but it jars the ear. Accordingly "We will effect
production..." highlights the point with greater skill.
"Idea" This word is bad for your own side but helpful against
others. Ideas as such are not generally protected by law. If you submit
something to a company with any hope of reward you must find better
phrasing than "my idea". Perhaps, "my format" or possibly "my
property" is more appropriate. Naturally, if you can develop an idea
into a format or protectable property, the more ambitious phrasing
will be better justified.
"As between us" It is useful, because people are always forgetting
or neglecting to mention that a great many interests may be
involved in what appears to be simple dialogue. "I reserve control
over..." and "You have the final power of decision over..." sound like
division of something into spheres, but frequently "I" am in turn
controlled by my investors and "You" - by a foreign parent company, making
the language of division inaccurate. Neither of us really controls
anything, at least ultimately.
Thus it will be useful to say, "As between us, I control..." and so
on.
"Spanning" Time periods are awkward things: "...for a period
commencing August,1 and expiring November,15..." is clumsy; "...from
August,1 to November,15..." is skeletal when informing how long a contract
obligation endures.
But during particular time periods one may be reporting for work, for
example, three days out of every five, or doing something else that is
within but not completely parallel to the entire time period involved.
A happy solution is the word "Spanning". It goes this way:
"Throughout the period spanning August,1 - November,15 inclusive you will
render services as a consultant three days out of every five."
It will be useful to put "inclusive" at the end for without it you may
lose the date, concluding the period being spanned.
"Negotiate in Good Faith" The negotiators have worked until late
at night, all points but one have been worked out, the contract will never
be signed without resolution of some particular impasse. What is there
to do?
Agree to "Negotiate in Good Faith" on the disputed point at later time.
This is done frequently, but make no mistake about the outcome. The open
point remains open. If it happens to be vital you may have no contract
at all. "Negotiate in Good Faith" is one of those evasions that must be
used sparingly. At the right time it prevents collapse, at the wrong time
it promotes it.
"Confirm" It suggests, of course, that something has been agreed upon
before. You are writing now only to make a record of it. "I write to
confirm that you admit substantial default in delivery" Frequently we
encounter it in ordinary correspondence: "Confirming your order",
"Confirming the main points of our agreement", and so on.
"Furnish" It is a handy word which usefulness lies in the avoidance
of worse alternatives. Suppose you transact to deliver a variety of
elements as a package.
"Deliver" leaves out, even though it may well be implied, the
preliminary purchase or engagement of these elements, and at the other end
it goes very far in suggesting responsibility for getting the package
unscathed to where it belongs. Alternatives also may go wrong, slightly,
each with its own implications. "Assign" involves legal title; "give" is
lame and probably untrue; "transmit" means send.
Thus each word misses some important - detail or implies unnecessary
things. "Furnish" is sometimes useful when more popular words fall short
or go too far. It has a good professional ring to it as well:
"I agree to furnish all of the elements listed on Exhibit A annexed hereto
and made part hereof by incorporation."
Who is responsible for non-delivery and related questions can be
