Sunday, March 3, 2013

Shall" or "Will" - which obliges more in a contract?


On linkedIN someone asked the question whether “shall” or “will” obliges a party more. I like to capture these issues and share them. Since I was probably day dreaming in English class about the use of the two words, I found Shelley Schachter-Cahm’s post about usage to be good advice. “Although they both have the same meaning, there is a slight preference for "shall" as being imperative whilst "will” denotes intention …., Usage is explained as follows: use shall in the first person and will in the second and third persons for the simple future tense: I shall sing this afternoon. You will succeed. He will stay at home and eat chocolate

From a contract perspective both terms have the same meaning. Both terms represent firm commitments by the party making that commitment. Neither obliges a party more.

When you write contracts you should always write them in active voice sentences so it is clear who has the responsibility. (See post “Writing Contracts in the active voice”). An example of an active voice sentence is "Supplier shall deliver the Product to the Buyer on June 1, 2013, ex-works Supplier’s dock”. In that sentence Supplier, Product and Buyer are defined terms. The responsibility is clear:
Supplier is responsible to deliver the Product
Supplier is responsible to deliver it to the Buyer on June 1, 2013
The delivery terms are ex-works at supplier’s dock

In active voice sentences you always write in the first person so you should use “shall” when writing about a commitment by either of the parties to the agreement. If you are writing about an action in the future tense by one of the parties you can use “will”. Most people who write contracts don't follow usage guides and will use “shall”. If you are writing about an action required of a third party, then you would use “will”. For example: “Contractor shall submit samples of materials to be used to the Architect for Approval. Architect will approve or reject such samples within ten calendar days after receipt of the sample”.

Another key in drafting is when you use terms, be consistent in their use throughout the document. I can always tell when someone did a "cut and paste" between multiple documents when I see inconsistent terms being used and that can cause problems.