Good contract drafters usually try to avoid vague or ambiguous language in their contracts. Except, of course, when they are indulging in constructive ambiguity – a concept that brings IP Draughts out in a rash, particularly when combined with a client who mistakenly thinks that his personal intentions during negotiations are relevant to the interpretation of the contract. Under English law, evidence of a party’s subjective intent, or the drafting history, is generally not admissable when the court interprets contractual language.
Regrettably a lot of people don’t realise this, including at least one US Federal judge. See the recent, US case of Bayer CropScience AG v Dow Agrosciences LLC (links to the several case reports here) in which, in IP Draughts’ view, the judge makes a complete hash of applying English law rules of contractual interpretation in relation to the grant clause of a patent licence agreement. But that is not the main subject of this posting.
One of the areas where drafting precision is important is where the text refers to an item (eg an obligation) set out in another clause, or to another sentence in the same clause. Contracts sometimes vaguely refer to “the said …” or “such …” as a shorthand, and this vagueness can lead to disputes, particularly if there is more than one preceding example and it is not clear which one is being referred to. A classic example of this can be found in the Rainy Sky case, which IP Draughts blogged about in 2011 and re-posted earlier today.
Consider the following, fictitious example:
At the start of each monthly meeting, the Vendor shall perform a handstand before bowing three times to the Purchaser’s representative.
During such meetings with the Purchaser, the said Vendor shall…
In this example, “said” is completely redundant, assuming that Vendor is a defined term. If, however, vendor is not defined, and in the unlikely case that it is appropriate to cross-refer to an earlier usage, “said” is not the word to use, as it has an old-fashioned, lawyerly, off-putting ring to it.
Often, no linking word is needed, because it is obvious in context that the term means the same as it meant in the earlier reference. Lawyers are sometimes too ready to reach for legal-sounding jargon, and a few seconds spent thinking about the point may lead to the conclusion that there is no plausible ambiguity.
If a word really is needed, “that” sounds better than “such”, and “such” sounds better than “said”, at least to IP Draughts’ ear. But if a word is used several times with the same meaning, IP Draughts often finds that defining the word, and then using the defined term, is a simple way of avoiding these types of vague links. Alternatively, one could refer more precisely to the previous usage, eg by referring to the “[item] described in clause X” or “[item] referred to in the previous sentence”.
Without seeing the rest of the agreement, it is impossible to know whether the second sentence in the above example would be ambigious without the word “such”. Are there any other references in the contract to meetings, eg annual meetings? Will the second sentence only apply to the monthly meetings referred to in the previous sentence? And if so, does “such” remove the ambiguity?
Depending on context, it may well be better to use one of the following phrases in place of the second sentence:
- During meetings with the Purchaser…
- During monthly meetings with the Purchaser…
- During all meetings with the Purchaser…
Other formulations may be even better. And “At each meeting…” may be better than “during meetings”, again depending on context.
In IP Draughts’ view there is no hard-and-fast rule about this issue, but “such” is an over-used word that sometimes gives a misleading impression of precision, and sometimes is best avoided in contracts.