Corporate & Securities Law

Magic Words

Posted on December 06, 2008
If often find myself alluding to the “magic words” approach to drafting. Here’s what I mean: You’re using magic words when you don’t clearly articulate in a contract a given concept but instead use legalese to grope at the intended meaning, in the hope that custom, or the courts, will fill in any gaps...

?Indemnitor? and ?Indemnitee?

Posted on December 04, 2008
In an exchange of emails this evening, my correspondent inadvertently used “indemnitor” when he meant “indemnitee.” It’s in order to avoid just such confusion that I recommend in MSCD 1.72 that you not use as defined terms for party names any paired defined terms that differ only in their final syllable, such as Mortgagor and Mortgagee...

Report on the 2008 Penn Law Redrafting Project

Posted on December 04, 2008
As one of the assignments in my Penn Law contract-drafting course, this semester I once again asked my students to redraft part of a contract currently being used by a company. This time, I selected a template master services agreement submitted by a Fortune 500 company in response to this May 2008 post...

Enumerated Clauses?When the Trunk Is Too Short for the Branch

Posted on November 30, 2008
It’s generally a bad sign when, barely after it begins, a sentence shifts into a set of enumerated clauses: If (1) A, (2), B, or (3) C, then X. Acme shall (1) A, (2) B, and (3) C. In such sentences, the drafter is forcing the reader to make a connection between each enumerated clause and the stub [...

To access this complete feed in the blog feed reader login or register for free.

Don?t Use ?Immediately? for Things that Happen Automatically

Posted on November 30, 2008
MSCD 12.258?277 discusses the distinction?or not?between immediately and promptly. Here’s another aspect of immediately?it’s often misused in connection with stuff that happens automatically. Consider the following provision: This agreement will terminate immediately upon Acme?s giving Widgetco notice of termination...

In-House Seminars in London, January 2009?

Posted on November 28, 2008
After a long absence, I’ll be in London over the holidays, visiting family and giving my daughter a brief introduction to the land where I spent fifteen years before sloping off to law school in the U.S. I had planned on returning to the U.S. early in January, but I find myself discussing with clients the [...

Ambiguity in Specifying the Time of Day

Posted on November 26, 2008
Reader Matthew pointed out to me an ambiguity I hadn’t thought of. Here’s the language at issue: If the Escrow Agent receives from the Seller a Counter Notice before 2:00 p.m. on the date that is 20 Business Days after the Escrow Agent received the corresponding Claim Notice, the Claim must be resolved in accordance with section [...

Details of 2009 Seminar Dates Now Online

Posted on November 25, 2008
I’ve updated the public seminars page with information about the U.S. “Language and Layout” seminars I’ll be giving with West Legalworks in the first half of 2009. In the next few days I’ll update the West Legalworks banner links with the same information.

Defined Terms for the Components of a Transaction

Posted on November 23, 2008
I’ve been urging my Penn Law students to curb their tendency to create more defined terms than a given contract requires. That led to one of my students sending me the following message regarding our final assignment, the Penn Law redrafting project: Dear Professor Adams, I just took a look at your version of assignment 5...

More on Using Words and Numerals to Express Numbers

Posted on November 23, 2008
Most drafters use words and numerals to express numbers?as in no later than thirty (30) days after Acme delivers a Termination Notice. Numerals are easier to read than words but are more prone to typographic errors, so using both affords the immediacy of numerals while providing insurance against a transposed decimal point or an extra or [...

Choosing Among Alternative Categories of Contract Language

Posted on November 19, 2008
When in my “Language & Layout” seminars we discuss categories of contract language, I emphasize that in addressing a given issue one sometimes has a choice as to which category of contract language to use, but that one will work better than any other...

?Shall? Versus ?Will? in Business Contracts?An Exchange of Emails

Posted on November 18, 2008
I’ve previously written in this blog about why I recommend that one use shall in a disciplined manner rather than throw it under a bus. Discussion of this topic features prominently in chapter 2 of MSCD, as well as in my October 2007 NYLJ article...

Thoughts on PLI?s Drafting Program

Posted on November 11, 2008
In a recent email exchange, a corporate partner at one of the big law firms told me that he wasn?t sure how my “Language and Layout” seminar differs from the Practicing Law Institute’s day-long program on contract drafting. So when last week a flyer for that program?”Drafting Corporate Agreements 2009“?arrived in the mail, I made [...

Nicknames for Contract Provisions

Posted on November 11, 2008
Thinking about materiality-scrape provisions had me pondering idly what other contract provisions are known by nicknames. Only three came to mind?ipso facto clauses, anti-sandbagging provisions, and “garden leave” clauses. A lame effort by yours truly...

The Structure of M&A Contracts?Materiality-Scrape Provisions

Posted on November 11, 2008
Wearing my “structure of M&A contracts” hat, this week I revisited a relatively recent addition to indemnification provisions in acquisition agreements?the “materiality scrape” provision. (What a charming moniker?it brings to mind scraping muck off the sole of one’s shoe...

Adams ABA-Panel Doubleheader

Posted on November 11, 2008
Later this month I’ll be on two ABA panels on consecutive days. First, I’ll be on the panel for a November 20 ABA-CLE webcast entitled “Getting the Business Deal into the Contract.” It’s an encore performance of a panel discussion held at the ABA’s 2008 annual meeting...

Drafting Guru, Anyone?

Posted on November 07, 2008
With publication of the second edition of A Manual of Style for Contract Drafting, I’ve been taking stock. I roam the land giving public and in-house seminars. I teach at a great law school. And I get to explore and write pioneering stuff about a vital yet problematic activity?contract drafting...

?Asserts??Revisiting ?Represents and Warrants? Once More

Posted on November 03, 2008
Longtime readers of this blog will be aware of my hostility towards the phrase represents and warrants (and representations and warranties). Over the weekend I was reminded that I don?t include in the MSCD discussion (starting at 12.285) a point I make in my seminars...

?I Don?t Always Agree With You ??

Posted on November 03, 2008
Every so often someone says to me, in connection with MSCD, “I don?t always agree with you.” My ears prick up when I hear that. It suggests to me three possibilities: The speaker has spotted flaws in my analysis. The speaker misguidedly regards contract drafting as a craft, with the drafter being free to select at will [...

?Can? and ?Cannot?

Posted on November 03, 2008
If you’ve perused chapter 2 of MSCD (Categories of Contract Language), you’re aware that I have a mania for disciplined use of verbs in contracts. But I haven’t previously had occasion to discuss use of can and cannot; I’ll do so now...

What Does One Do If a Signature Date Is Omitted?

Posted on November 01, 2008
One topic we discuss at my “Language and Layout” seminars is when it’s appropriate to have signatories date their signatures, as opposed to relying on the date stated in the introductory clause. (This is discussed in MSCD at 1.16?21 and 4...

Seeking MSCD Testimonials

Posted on October 26, 2008
Recently the public radio stations I listen to concluded their fall fund drives. I thought I’d attempt something analogous and repeat a previous request: The ABA is in the process of collecting testimonials (otherwise known as “blurbs”) for the second edition of A Manual of Style for Contract Drafting...

?Together With?

Posted on October 24, 2008
Contract drafting is facilitated if you find the simplest way to articulate a given meaning and then stick with it. That applies to the small stuff, too. Take, for example, together with. Often you’re better off trading two longer words for one shorter one?and: “Hotel” means the Site together with [read and] the Buildings...

?Cohabitation??It?s Ambiguous

Posted on October 23, 2008
Who knows what ambiguity lurks in the heart of contracts? Well, reader Steven Sholk has an inkling, because he’s the one who told me about Graev v. Graev, 2008 N.Y. LEXIS 3252 (N.Y. Oct. 21, 2008), a case that involves the meaning of the word cohabitation...

The Structure of M&A Contracts?When Are Representations Made?

Posted on October 21, 2008
Over the course of the past few years I’ve been working sporadically on a shortish (16,000 words) manuscript entitled “The Structure of M&A Contracts.” It discusses the function of the different categories of provisions in an M&A contract (representations, pre-closing obligations, conditions, indemnification, and termination provisions), the interplay between those categories of provisions, and the [...

Recession?A Good Time or Bad Time for Overhauling Your Contract Process?

Posted on October 17, 2008
In my writings and during my speaking engagements, I talk up the benefits of overhauling your contract process, templates and all. In the past few weeks, I’ve been wondering if given the current travails?whether you call it a recession or something else?I should adjust my recommendations...

Some MAC Thoughts on Hexion v. Huntsman

Posted on October 17, 2008
Last June, Hexion Specialty Chemicals announced that it was walking from its $10.6 billion acquisition of Huntsman Corp. on the grounds that the capital structure for the combined entity was no longer viable and would render it insolvent. Hexion filed suit in Delaware, and on September 29, 2008, Vice Chancellor Lamb issued his opinion...

Law-Firm CLE as Client Development

Posted on October 16, 2008
Yesterday I was at Dorsey & Whitney’s Minneapolis office. I gave my “Language and Layout” seminar there last year, but yesterday’s event was different. It was billed as “A Conversation with Ken Adams.” Bryn Vaaler?Dorsey’s professional-development partner?and I parked ourselves on the stage in Dorsey’s conference center and chatted for an hour about the world [...

Including ?And? or ?Or? in a Tabulated List

Posted on October 13, 2008
For diehard fans of and and or?you know who you are!?the case of Harrity v. Target Corporation, Civ. No. 07-3958 (D. Minn. Oct. 6, 2008), might be of modest interest. The plaintiff was seeking reimbursement under Target’s medical insurance plan, but the court granted summary judgment...

?Default or Event of Default?

Posted on October 12, 2008
A few months ago a reader asked me what I thought of the phrase default or event of default. Here, belatedly, is my answer, along with my thoughts on a related phrase, has occurred and is continuing: “Default or Event of Default” The phrase default or event of default is a fixture of loan agreements...

Bloggers, promote your law blog by nominating your blog for inclusion in USLaw.com's Law Blog Directory and RSS Reader. Benefits described.