|Oregon State Bar Bulletin FEBRUARY/MARCH 2012|
By Elizabeth Ruiz Frost
When we draft legal documents for our clients, we aim to articulate who can do what and when. Those rights and obligations are established through words of authority. But in legal writing, inconsistent use and interpretation of some words of authority can create ambiguity in our documents.
The word shall can be particularly troublesome. Drafters often use shall in place of other words like does, will, should, might or may. If we use shall sometimes to connote a mandatory term, at other times to connote a discretionary term, and once in a while to connote a future event, how can a reader accurately determine our intent? When a word of authority is used inconsistently, courts are left to determine the word’s meaning. To avoid squabbles over ambiguous terms, think through each word of authority that you write and use these words consistently.
In legal drafting, reserve shall for imposing a duty upon a party to the agreement. Shall is a mandatory word, and the subject of the sentence should be obligated to do something as a result of the shall. Here is a quick test for determining whether you’re using shall correctly: can you replace the word shall with has a duty to? If not, you might be creating ambiguity. Despite that test’s simplicity, lawyers continue to misuse shall in a number of ways.
For instance, drafters frequently use shall to describe discretionary terms. Shall is sometimes incorrectly used to express a party’s right or to grant permission. A sign at my grandmother’s condominium reads: “Residents shall use the pool from 9:00 a.m. to 7:00 p.m.” Egads, that sounds exhausting! I suspect the writer meant may instead of shall.
Just as commonly, drafters use shallto connote futurity when other words will do. For example, “Tenant’s failure to pay rent shall constitute a material breach and this Agreement shall terminate.” Both parts of that sentence refer to future events; will more aptly describes the situation than shall.Moreover, the writer surely didn’t intend to impose a duty on an agreement.
Stranger still, definitions in contracts are often written as shalls. For example, a contract might define a term like this: “Interest Rate shall mean a rate per annum of 9 percent.” This construction can lead to a couple odd results. First, writing the definition this way could suggest the word will take on the meaning upon the occurrence of some future event. Hmm, when will interest rate mean that? Second, because shall imposes a duty when correctly interpreted, the writer has created a false imperative by obligating the poor, hapless interest rate to mean something. What is the remedy if the interest rate refuses to follow the drafter’s command? So doesn’t means make more sense than shall mean here? Means avoids the future problem and the obligation problem, and not insignificantly, means is more concise.
Finally, some drafters do intend to impose a duty with shall,but the subject is ambiguous. An ambiguous subject means the obligated party might be unclear. When a lease reads, “Repairs to the premises shall be made within 30 days of Tenant’s request,” the drafter might assume she has imposed a duty on the landlord to make prompt repairs. After all, who else would repair the premises? But has the drafter actually imposed a duty on the landlord? And is that imposition clear and unambiguous? Or, by phrasing this in the passive voice, has the drafter just created some obligation to be satisfied by the Fates? Cleaning this problem up is simple. Just include the subject in the sentence: “Landlord shall make repairs to the premises within 30 days of Tenant’s request.”
The Ubiquity of Shall
Some of us may magnify the problem of shall’s imprecision by overusing the term. Lawyers tend to rely heavily on shall in drafting. Perhaps we overuse shall in part because it has such a nice, lawyerly sound. But lots of words sound lawyerly — like sine qua non and estoppel — and we don’t get to use those where they don’t make sense.
I counted the number of shalls in a standard form loan agreement (that I didn’t draft, for the record). Shall appeared 66 times on the first 20 pages. In 12 of the 66 instances, the drafter used shall as a mandatory term to impose a duty. For example, “Borrower shall pay to Lender a late fee in an amount equal to five percent of the principal.” Of those 12 instances, only three shalls directly imposed a duty on the subject of the sentence. In the remaining nine instances, the subject was unclear.
In 33 of the 66 instances, shall meant will. For example, “The outstanding principal balance of the Loan shall bear interest at a rate per annum equal to the Interest Rate.” This could easily be revised to read “the Loan will bear interest…,” or simply “the Loan bears interest…”
And finally, in 26 instances, the drafter used shall to explain a defined term, as in: “Closing Date shall mean the date on which the Closing occurs.” Significantly, the remaining 151 defined terms followed an “X means Y” format instead of “X shall mean Y.” Might it yield confusion when over 80 percent of the definitions mean something right now, but 20 percent of the definitions seem to mean something at some future, unspecified date? The drafter should have phrased the definitions consistently to avoid questions later.
Delete all the Shalls?
Should drafters do away with shall altogether? Bryan Garner thinks so. In his book, Legal Writing in Plain English,Garner suggests that we delete all our shalls in favor of a more precise word. If the goal of drafting is precision, then surely we should avoid a word that gets used by lawyers and interpreted by courts inconsistently. Even the federal government has jumped on the bandwagon. In its Plain Language Guidelines, the feds take aim at shall, describing it as “officious” and “obsolete.” Drafters are encouraged to delete shall in favor of must to impose obligations. This approach — wholesale elimination — is called the ABC Rule. The rule is named after the Australian, British and Canadian proponents who concluded that lawyers could never be trained to use shall consistently. How cynical!
Perhaps the ABC Rule is correct: the word is not the problem; the word users are. But I suspect that if we drop shall from our vocabulary, equally ambiguous terms will fill the void. Eradicating shall to resolve ambiguity is like throwing away the ice cream in my freezer so I will eat healthier. Sure, that ice cream is gone, but I still have hundreds of leftover Valentine’s Day candies in my desk drawer. (Look forward to my forthcoming column on crafting nonsensical similes!) Shall can still work as long as you use it judiciously and uniformly for its preferred meaning. Just remember the following:
Shall expresses a mandatory term and should directly and clearly impose a duty on the subject of the sentence. If shall can be replaced with has a duty to in your sentence, you’re probably using it correctly. For example:
“The Bulletin shall pay me $100,000 for each submission to The Legal Writer column.”
Must is tricky because shall can always be replaced by must, but must cannot always be replaced by shall. Yikes! In other words, must can also express a mandatory term, but you can also use it in contexts where no duty is imposed. That is, must works well to establish a condition precedent when no party is compelled to act. Consider the following examples where the actors do not have a duty to act, but their action is required before a subsequent act can occur:
“A bill must be ratified by a majority of the Senate.”
“All owners must vaccinate their dog before the dog may be boarded at the kennel.”
Will expresses futurity or signals an agreement between the parties. Use will when you intend to show that parties have agreed upon an event’s occurrence without intending to impose a duty on a party. For example:
“Borrower represents and warrants to Lender that the statements in this section will be, true, correct and complete as of the closing date.”
“This Loan Agreement and the Loan Documents, when executed and delivered, will be legally valid and binding obligations of the Borrower.”
May expresses a permissive term or grants rights to a party. When you use may, you indicate that the term or act is merely discretionary, not mandatory. For example:
“The bank may require the mortgagor to obtain endorsements to the title policy.”
“If the tenant refuses to pay utility bills in a timely manner, the landlord may make such payments, and the tenant shall reimburse the landlord on demand for all such payments.”
Consistent use of the word shall may reduce the likelihood of confusion and yield more predictable interpretation. Next time you draft a document, look for the shalls and consider whether you are using each one accurately and consistently. Particularly when you see several different uses of the word in the same document or set of transaction documents, ask yourself whether a more precise word could replace the shalls. Or better yet, ask a junior lawyer to do it and report back. Correct and consistent use of words of authority might save us the trouble of eradicating a perfectly good word from our vocabulary. So let’s agree to rethink words of authority. Shall we?
ABOUT THE AUTHOR
Elizabeth Ruiz Frost teaches Legal Research and Writing and other courses at the University of Oregon School of Law.
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© 2012 Elizabeth Ruiz Frost