Gavin Howe
The word shall is a frequently litigated term in contract law, with some arguing for its removal from legal vocabulary due to its ambiguity and others defending its continued use. The interpretation of shall can vary depending on the context and the person it is referring to. For example, in the first person, will conveys an obligation, whereas shall indicates a future intention. On the other hand, when used in the second or third person, will implies a future obligation, while shall signifies compulsion and obligation. This distinction is important in contract law, where the interpretation of shall can significantly impact the obligations and rights of the parties involved.
| Characteristics | Values |
|---|---|
| Interpretation | Shall can be interpreted in different ways and can be ambiguous. |
| Usage | Shall is used to express a future intention or obligation. |
| First-person usage | Shall conveys a future intention when used in the first person. |
| Second and third-person usage | Shall imports compulsion and obligation when used in the second or third person. |
| Risk | Shall poses no real risk, and litigation involving the term mostly involves statutes, not contracts. |
| Absolute obligation | Must is preferred over shall to indicate an absolute obligation. |
| Readability | Using shall can make contracts less accessible and harder to understand. |
| Controversy | Shall is one of the most controversial words in legal writing. |
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What You'll Learn
'Shall' vs 'will'
The use of "shall" and "will" in contract law has been a subject of debate among legal professionals, with some recommending the use of one over the other to avoid ambiguity and ensure clarity in legal obligations.
"Shall" and "will" are auxiliary verbs, also known as helping verbs, and are used with other verbs to form the future tense. While "will" is commonly used to express determination, inclination, or capability, "shall" is often used to express intent or obligation. For example, "I shall go to the store" implies that the speaker intends to go to the store, while "We will pay the money we promised" indicates a promise or determination to take action.
In legal contracts, both "shall" and "will" can be used to indicate a legal obligation or duty. However, the word "shall" has been described as one of the most frequently litigated words due to its varying interpretations. Some legal professionals recommend avoiding the use of "shall" altogether, as it can be confusing and create ambiguities in legal documents. Instead, they suggest using alternatives such as using "will" or must to indicate obligations or duties.
On the other hand, some legal scholars argue that eliminating "shall" is unnecessary and that it can be used correctly in certain contexts. They recommend that contracts professionals understand the appropriate use of "shall" and use it only in those specific instances. In legal contracts, "shall" can be used to impose a duty or obligation on the subject of the sentence, who must be a legal person.
To illustrate the distinction, consider a recent case involving a City of Chicago ordinance. The ordinance stated that a notice of a traffic violation "shall include all applicable information required in specific sections of the Illinois Vehicle Code." However, the city issued violation notices that did not include all the required information. Motorists who received these violations filed a lawsuit, arguing that the notices were unenforceable because the use of "shall" indicated a mandatory requirement. The Appellate Court of Illinois, however, held that the question was not about whether "shall" denoted a mandatory or permissive action but rather whether it was mandatory (required) or "directory" – something the government should do but that does not invalidate the action if not done.
In conclusion, while both "shall" and "will" can be used in contract law to indicate obligations, the use of "shall" is more controversial due to its potential for ambiguity. Legal professionals must carefully consider the context and intent of the contract when choosing between "shall" and "will" to ensure clarity and avoid potential litigation.
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'Shall' vs 'must'
In contract law, the use of "shall", "must", and "will" is important when drafting obligations. The choice of words must be carefully considered to ensure that the obligations are properly imposed and that recourse is available if the counterparty fails to perform its obligation.
"Shall" is typically used to indicate an externally imposed mandate, conveying an action that a party is obligated by contract to pursue. For example, "The Buyer shall pay the Seller the Purchase Price at the Closing". However, some legal writing scholars argue that "shall" has become corrupted by misuse and can now mean 'must', 'should', 'will', 'may', or 'is'. As such, some recommend using “must” instead of "shall" for a mandatory word.
"Must" conveys an obligation that a party "is required to do/not do" something. It is best used when the duty arises from something other than the contract in question. For example, "You must not transfer, assign, or convey your Account, Contributor membership". "Must not" indicates that something is required not to do or is disallowed.
While the choice between "shall" and "must" may not significantly impact the interpretation of the contract as long as the intended consequence is clear, using "must" provides the safest and most definitive way to capture an intended absolute obligation. This is because "must" always suggests an absolute obligation, whereas "shall" may be misinterpreted as not indicating a requirement or explicit prohibition.
It is important to note that whichever word is chosen, it should be used consistently throughout the contract. Additionally, it is recommended to use moderate enumeration and tabulation for small contracts and effective, readable typefaces and type sizes.
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'Shall' and 'may'
The use of "shall" and "may" in contract law is a contentious issue, with some arguing for its removal from legal vocabulary due to its ambiguity and others defending its continued use. "Shall" is often used to indicate a mandatory action or obligation, but its interpretation can vary depending on the context and the person it is referring to. For example, in the first person, "will" conveys an obligation, while "shall" indicates future intention. On the other hand, in the second or third person, "will" indicates a future obligation, while "shall" implies compulsion and obligation. This distinction is important to understand when drafting contracts to ensure the intended consequence is clear.
The word "shall" has been described as one of the most frequently litigated words, with some scholars advocating for its removal from legal writing due to its potential for ambiguity and confusion. For instance, in a case involving the City of Chicago, a group of motorists filed a class action lawsuit arguing that violation notices for traffic infractions were unenforceable because they did not include all the information that was mandated by the ordinance. The Appellate Court of Illinois, however, did not consider the word "shall" as denoting a "mandatory" versus "permissive" action but rather interpreted it as "directory", meaning the government was directed to perform the action but failure to do so would not invalidate the action.
Despite the controversy surrounding "shall", it remains firmly entrenched in transactional circles and is defended by some legal professionals. They argue that "shall" serves a useful function and that disciplined use of the word is preferable to its complete removal. Additionally, the language of contracts is slow to change, and "shall" is expected to remain a prominent feature for the foreseeable future.
"May", on the other hand, suggests discretion and is often used to indicate that an action is possible or permitted but not mandatory. When used in combination with "shall", as in the famous phrase "We shall fight on the beaches, we may fight on the landing grounds", the contrast between the mandatory nature of "shall" and the discretionary nature of "may" becomes apparent.
In conclusion, while the use of "shall" and "may" in contract law is a complex and debated topic, ensuring clear and consistent drafting is crucial to avoid ambiguity and potential litigation. "Shall" continues to be a prevalent feature of contract law, but it is important for legal professionals to understand its appropriate usage to ensure the intended consequences are achieved.
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Future perfect tense in contracts
The future perfect tense is often used in contracts to express conditions. For example, "it is a condition of the Buyer's obligation to purchase the property that the Seller shall have done X, Y, and Z" or "that the Buyer shall have obtained financing." Here, the future perfect tense ("shall have done" and "shall have obtained") indicates that something will be completed at a specified time in the future, which is often a requirement for fulfilling the contract.
The use of "shall" in contract law has been a subject of debate among legal professionals and writers. Some argue that "shall" should be avoided due to its ambiguity and potential for misinterpretation. For instance, Bryan Garner, author of "Legal Writing in Plain English," recommends avoiding "shall" and using alternative words like "must" or "will." This is because "shall" can have different interpretations and may create confusion, leading to litigation.
However, others like Ken Adams, author of "A Manual of Style for Contract Drafting," defend the use of "shall." Adams argues that eliminating "shall" entirely is unnecessary and that it has its appropriate contexts, especially in creating obligations. He suggests that understanding the different types of contract language, such as agreement, performance, obligation, and conditions, is crucial for effective translation and drafting.
In the context of future perfect tense, "shall" is commonly used to indicate a promise or covenant in a contract. For example, "Buyer shall pay $50 to Seller" indicates a promise by the buyer to make a payment. Some legal professionals argue that "shall" creates a stronger sense of obligation than using "will."
When using the future perfect tense in contracts, it is essential to consider the specific context and intention behind each clause. While "shall" is commonly used for creating obligations and conditions, alternative words like "will" or "must" can also be considered to achieve the desired effect and avoid potential ambiguities.
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'Shall' in covenants
The word "shall" is often used in contracts, including those with covenants, but it can be ambiguous and is one of the most frequently litigated words. Some legal professionals recommend avoiding it, while others argue that eliminating it is "throwing the baby out with the bathwater". To balance these differing views, it is recommended that contracts professionals learn when "shall" can be used correctly and use it only in those instances, if at all.
A covenant is an agreement to do or not do something. It is an unconditional promise found in contracts, and the failure of a party who makes such an agreement to abide by its terms will entitle the other contracting party to damages for breach of contract. Such damages are usually calculated on the basis of how much it will cost the non-breaching party to be in the same position as they would have been had the breach not occurred.
Covenants may impose restrictions or insist on actions. They are often found in financial or property-related contracts, where one party wants a guarantee that something will or won't occur. For example, a property covenant may restrict certain actions, such as altering particular architectural features, or it may insist on certain actions, such as maintaining a shared driveway or erecting a boundary wall or fence.
In the context of covenants, "shall" can be used to impose a duty on the subject of the sentence, such as in the phrase "Lessee [an actor capable of carrying out an obligation] shall [has a duty to] sell the remaining oil". However, it is important to use "shall" correctly to avoid ambiguity and potential litigation. For example, a City of Chicago ordinance stated that a notice of a traffic violation "shall include all applicable information required in Sections 11-208.3, 11-208.6 and 11-208.8 of the Illinois Vehicle Code". The city issued violation notices that didn't include all of the required information, and a group of motorists filed a class-action lawsuit, arguing that the violation notices were unenforceable because the ordinance stated they "shall" include certain information. The Appellate Court of Illinois held that the question wasn't whether "shall" denoted a "mandatory" versus "permissive" action, but rather whether "shall" was mandatory (required) or "directory" – something that the government is supposed to do but that won't invalidate government action if not done.
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Frequently asked questions
"Shall" is used to denote a duty or an obligation, whereas "will" is used to create a promise or contractual obligation. "Shall" is also used to import compulsion in the second or third person.
"Shall" is typically used in the covenants (promises) of a contract. It is also used to denote an obligation on a party, for example, "the Seller shall deliver the Product".
Some alternatives to "shall" include will, must, may, and "has an obligation to". "Shall" can also be replaced with "will" if it helps smoothen the sharp edges from the obligatory nature of "shall".
