Seen in a contract between two large-ish companies which shall remain nameless:
“If [list of conditions omitted], then Company shall have a presumptive right to extend the contract.”
Discussion questions:
- What’s a “presumptive right?” Is that different from a regular right?
- Is “shall have” different from “will have?” Or, for that matter, “has?”
- All in all, how is “shall have a presumptive right to” different from “may?”
1. A “presumptive right” is based on a reasonable assumption of rights and the default situation. It is a claim, but not an absolute claim, as it may be modified by the weighing of privileges and rights of others. A presumptive right holds in the absence of other claims, and generally gives at least a reasonable basis to make a claim.
2. “Shall” in the third person is used in cases where an obligation, promise, or permission of another party (often the speaker) is involved, rather than merely the intent of the doer or an inherently true future fact, is the issue. In this case, there is a obligation from the other party to the Company granted the right. (Note that, traditionally, in the first person the meanings are reversed.) That’s the traditional explanation, and holds force for those who use different meanings. “Shall” is also commonly used as a type of subjunctive in legal documents. “Has” would be in a different tense, and change the form of the conditional. Using “has” would express the idea that the conditions in the “if” clause already exist, or state a simply fact that simply follows from the conditions. Using “will” or “shall” (in combination with the present in the if clause) indicates that the conditions are possible or commonplace, but not guaranteed or already known.
Just using “has,” therefore, would somehow assert that right exists if the conditions are already true, not if they become true in the future, and express some degree of confidence that they do already exist.
3. “may” can be used to indicate mere possibility, instead of permission, though it has both uses. The more verbose phrasing is more precise.
For example, the list of conditions could be met, but at the same time the other company could declare bankruptcy, and parts of the contract be voided despite the presumptive right.
I agree with John 100%.
Just one addendum to question 1: While his definition is just about perfect, I have the feeling “presumptive” could be a word of art with no other function thatn to soften the value strength of “right.”
But then again, I’m by no means a star drafter.
I agree with John. Technically.
Thing is, the longer wording is no more precise *when you look at it in the context of a contract*, because you know that in a contract, the word “may” is not denoting possibility. If It were, what would the sentence substantively mean? Nothing, And as they tell you in first-year Contracts class, you always construe words so they have meaning.
As for the whole will/shall thing, or whether to put the “have” in the present tense or not, I’m convinced that it’s all voodoo legalese. No matter which wording is used, you’re probably going to be bound unless the wording makes it clear you aren’t bound. I don’t think there are courts out there that will say “Oh-ho! You said ‘will’ instead of ‘shall!’ There goes your deal!” But I’m not a contract litigator, so what do I know.