Lawtalkers Must Learn English, not Legalese

[Martinus]

...

Same goes for all kind of boilerplates etc. (My personal favourite is a representation of a party to the agreement that the agreement is binding on that party - which is the legal equivalent of the Liar's Paradox and perfectly circular in its logic).

I've never seen that but I have seen perfectly reasonable representations that the signatory had actual authority to sign and that the corporation had provided whatever approvals were necessary for the officer to act.

But if it hasn't, then such representations (which are made on behalf of the company, and not the signatory) are worthless, since it also means the signatory is not authorised to make representations that he is authorised to sign the agreement.

If the signatory was making representations on his behalf, then it would be a different story - but these representations are normally made on behalf of the party he is representing.

[Martinus]

The funny (or annoying, depending on the perspective) thing about the Anglosaxon style of drafting is that it is unfortunately often expected by Anglosaxon clients, even in jurisdictions where it makes little sense.

For example, in most civil law jurisdictions, you have statutes defining most legal concepts pretty well and you really very rarely want to depart from the statutory definition of some term. So, for example, just stating "force majeure" in a Polish law agreement would be enough - you don't really need to define the term; yet Anglosaxon clients/lawyers want you to put all the verbal diarrhea stuff they usually put in their agreements.

Same goes for all kind of boilerplates etc. (My personal favourite is a representation of a party to the agreement that the agreement is binding on that party - which is the legal equivalent of the Liar's Paradox and perfectly circular in its logic).

Most anglo business people dont like the state's statutory default provisions, and most contract negotiations between sophisticated parties involve trying to allocate risk differently than some legistor saw fit to do it.

Only that in most cases they want to allocate it exactly the way it is outlined in the relevant legislation.

[Martinus]

...

Same goes for all kind of boilerplates etc. (My personal favourite is a representation of a party to the agreement that the agreement is binding on that party - which is the legal equivalent of the Liar's Paradox and perfectly circular in its logic).

I've never seen that but I have seen perfectly reasonable representations that the signatory had actual authority to sign and that the corporation had provided whatever approvals were necessary for the officer to act.

I've seen this sort of thing too, it is quite common - though its effect is a bit dubious - signing a representation that I have authority to act, have all internal approvals and can bind the corporation is not really different from signing the contract itself, since if I don't the fact that I said I did ought to make no difference either way.

It is to resolve problems like this that the Indoor Management Rule was developed.

No there is a difference; the signing of the representation allows the other party certain remedies in the event of breach to include a fraud suit against the corporate officer if its untrue.

It's not much of a benefit. They would generally have that remedy anyway, if in fact they had been defrauded ... and if it is untrue (that is, a real corporate officer did not get the required internal approvals) the indoor management rule would generally operate to the other parties' benefit: they could enforce the contract against the company.

Indeed. The situation would be the same under Polish law.

If such extra wording is necessary under US common law, then I guess the law is pretty primitive and formulaic.

[DontSayBanana]

...
; the problem with "legalese" is that much of it is simply meaningless verbiage, or the relic of legal theories from days gone past that has limited or no application these days, or copied from some precedent willy-nilly.

The danger is that some legalese remain magic words that have developed special meaning. For instance consider three judgments:

Judgment 1 (the plain english model).

Smith owes Jones $1,000.

Judgment 2 (the antiquated legalese model)

Smith shall have and recover $1,000 from Jones, for which sum let execution issue.

Judgment 3 (the antiquated model with extra special magic word)

Smith shall have and recover $1,000 from Jones, for which sum let execution issue, forthwith.

In this case, Judgment 1 is completely unenforceable under florida law as it is lacking the magic words that the executive branch needs to see before it will seize property in satisfaction of a judgment.


Judgment 2 is however fully enforceable but only after the expiration of the time (10 days) for the judgment debtor to move for rehearing and if such motion is filed only after the judge disposes of the motion (several weeks or months).

Judgment 3 is immediately enforceable without regard to any motion for rehearing as the executive branch understands the word "forthwith" to mean no delay for rehearing needed.

"For which sum let execution issue, forthwith" could just as easily be rephrased in plain English as "the judgment sum is due immediately."  It even takes up less space!

Again, there are plenty of grammatical errors that show up in legalese, and it's a shame that the judge should even have to make note of them, but by and large, it's prepositions and temporal adjectives that have fallen out of common usage in English that are the sticking point.

I only make note of this because if the court invalidates documents that would be otherwise legal to penalize "legalese," that's really going to test the limits of judicial discretion.  My personal feeling is that if it goes anywhere, it'll result in the ABA pushing more "plain drafting" education; considering how many guns have been leveled at the judiciary for acting unilaterally lately, I can't see them taking a chance on a judge throwing out cases simply because he doesn't like the style of the writing.

[crazy canuck]

But if it hasn't, then such representations (which are made on behalf of the company, and not the signatory) are worthless, since it also means the signatory is not authorised to make representations that he is authorised to sign the agreement.

Polish law doesnt recognize the concept of ostensible authority?  How is it that your contracting parties satisfy themselves that the person signing the document has actual authority?

[crazy canuck]

If such extra wording is necessary under US common law, then I guess the law is pretty primitive and formulaic.

Marti, you are the guy who apparently lives in a jurisdiction that allows people to avoid contractual liablity by simply claiming the person who signed the contract didnt have the authority to do so.

[Rasputin]

...

Same goes for all kind of boilerplates etc. (My personal favourite is a representation of a party to the agreement that the agreement is binding on that party - which is the legal equivalent of the Liar's Paradox and perfectly circular in its logic).

I've never seen that but I have seen perfectly reasonable representations that the signatory had actual authority to sign and that the corporation had provided whatever approvals were necessary for the officer to act.

But if it hasn't, then such representations (which are made on behalf of the company, and not the signatory) are worthless, since it also means the signatory is not authorised to make representations that he is authorised to sign the agreement.

If the signatory was making representations on his behalf, then it would be a different story - but these representations are normally made on behalf of the party he is representing.

correct but they bind the signatory individually under tort law in a situation when the officer would normally have no contract exposure as the agent of a disclosed principal

[Rasputin]

The funny (or annoying, depending on the perspective) thing about the Anglosaxon style of drafting is that it is unfortunately often expected by Anglosaxon clients, even in jurisdictions where it makes little sense.

For example, in most civil law jurisdictions, you have statutes defining most legal concepts pretty well and you really very rarely want to depart from the statutory definition of some term. So, for example, just stating "force majeure" in a Polish law agreement would be enough - you don't really need to define the term; yet Anglosaxon clients/lawyers want you to put all the verbal diarrhea stuff they usually put in their agreements.

Same goes for all kind of boilerplates etc. (My personal favourite is a representation of a party to the agreement that the agreement is binding on that party - which is the legal equivalent of the Liar's Paradox and perfectly circular in its logic).

Most anglo business people dont like the state's statutory default provisions, and most contract negotiations between sophisticated parties involve trying to allocate risk differently than some legistor saw fit to do it.

Only that in most cases they want to allocate it exactly the way it is outlined in the relevant legislation.

our experiences differ

[Rasputin]

...
; the problem with "legalese" is that much of it is simply meaningless verbiage, or the relic of legal theories from days gone past that has limited or no application these days, or copied from some precedent willy-nilly.

The danger is that some legalese remain magic words that have developed special meaning. For instance consider three judgments:

Judgment 1 (the plain english model).

Smith owes Jones $1,000.

Judgment 2 (the antiquated legalese model)

Smith shall have and recover $1,000 from Jones, for which sum let execution issue.

Judgment 3 (the antiquated model with extra special magic word)

Smith shall have and recover $1,000 from Jones, for which sum let execution issue, forthwith.

In this case, Judgment 1 is completely unenforceable under florida law as it is lacking the magic words that the executive branch needs to see before it will seize property in satisfaction of a judgment.


Judgment 2 is however fully enforceable but only after the expiration of the time (10 days) for the judgment debtor to move for rehearing and if such motion is filed only after the judge disposes of the motion (several weeks or months).

Judgment 3 is immediately enforceable without regard to any motion for rehearing as the executive branch understands the word "forthwith" to mean no delay for rehearing needed.

"For which sum let execution issue, forthwith" could just as easily be rephrased in plain English as "the judgment sum is due immediately."  It even takes up less space!

Again, there are plenty of grammatical errors that show up in legalese, and it's a shame that the judge should even have to make note of them, but by and large, it's prepositions and temporal adjectives that have fallen out of common usage in English that are the sticking point.

I only make note of this because if the court invalidates documents that would be otherwise legal to penalize "legalese," that's really going to test the limits of judicial discretion.  My personal feeling is that if it goes anywhere, it'll result in the ABA pushing more "plain drafting" education; considering how many guns have been leveled at the judiciary for acting unilaterally lately, I can't see them taking a chance on a judge throwing out cases simply because he doesn't like the style of the writing.

good luck with that


sometimes in representing a client its better to do what is 100% guaranteed to work rather than trying to prove a point or test the limits

[crazy canuck]

our experiences differ

I agree with you.  I have never met a client who was happy with the legislative norm, nor have I dealt with any lawyers in the EU who have suggested that we not try to negotiate a better deal.

[crazy canuck]

I've seen this sort of thing too, it is quite common - though its effect is a bit dubious - signing a representation that I have authority to act, have all internal approvals and can bind the corporation is not really different from signing the contract itself, since if I don't the fact that I said I did ought to make no difference either way.

It is to resolve problems like this that the Indoor Management Rule was developed.

That kind of language does help prove ostensible authority - ie we turned our mind to whether he had authority and he confirmed it and there was nothing which ought to put us on notice otherwise.

[Rasputin]

I've seen this sort of thing too, it is quite common - though its effect is a bit dubious - signing a representation that I have authority to act, have all internal approvals and can bind the corporation is not really different from signing the contract itself, since if I don't the fact that I said I did ought to make no difference either way.

It is to resolve problems like this that the Indoor Management Rule was developed.

That kind of language does help prove ostensible authority - ie we turned our mind to whether he had authority and he confirmed it and there was nothing which ought to put us on notice otherwise.

I concur; in addition to the objective indicia of apparent authority, an officer's representation of actual authority would also be probative in establishing apparent authority

of course this minutia is no where near as amusing as marty's anecdotes about dumb common law lawyers asking for needless representations or negotiating contracts to give themselves exactly what the legislature has already given them

[Malthus]

I've seen this sort of thing too, it is quite common - though its effect is a bit dubious - signing a representation that I have authority to act, have all internal approvals and can bind the corporation is not really different from signing the contract itself, since if I don't the fact that I said I did ought to make no difference either way.

It is to resolve problems like this that the Indoor Management Rule was developed.

That kind of language does help prove ostensible authority - ie we turned our mind to whether he had authority and he confirmed it and there was nothing which ought to put us on notice otherwise.

I'm not sure it would be particularly significant.

If someone signs a contract for a company, the issue is whether the other party has good reason to believe he is a person who has the sort of authority necessary to bind the corporation. That is one reason why contracts usually have a space for the person's job title as well as their name.

Say the person signs a contract "John Hancock, President & CEO". I hand over some benefit to "John Hancock" and later bill the company. The company can say one of two things:

- This really is John Hancock, CEO, but he needed board approval (or whatever) for this contract. He didn't get it. We ain't paying. (I.e., he had ostensible authority but did not get internal compliance)

- Who the fuck is John Hancock? (or, John Hancock - the janitor?) We ain't paying. (I.e., he had no authority to sign).

The first situation we all would agree I think is covered by the indoor management rule. The guy has ostensible authority (in that he did not misrepresent who he was) - he just didn't jump through the right hoops within the company. The contract is enforcable because it's not reasonable to expect the other party to know whether the correct hoops had been jumped through (and the company now has words to say to Mr. Hancock).

The second situation is trickier. Presumably Hancock is some sort of fraudster. Obviously if you can catch hold of Mr. Hancock and he's solvent, he's on the hook (either directly or third-partied by the company). Assuming you can't, the issue will then (I think) turn on what sort of dilligence the non-frauding party took in determining who Mr. Hancock was. If they were reasonably diligent and got fooled anyway, the company pays; if not, they eat the loss.

Thing is, in neither of these situations would Mr. Hancock swearing up and down he had real authority in the contract itself make much of a difference. Sure, it indicates the parties thought about the issue, but would that be significant evidence to convince a court that sufficient diligence was done so as to allow the non-defrauding party to enforce the contract against the company? Would it add anything to the claim against Mr. Hancock, if he was a fraud artist? You would expect a fraudster to lie about being a fraudster; why would a fraudster saying he's not a fraudster make any difference one way or another?

I honestly don't know; I never encountered this particular problem in reality. My instincts are that it is the difference between saying you have done due dilligence, and actually doing due dilligence; the former isn't much of a help.

[crazy canuck]

The thing you are missing Malthus is that sometimes in cases where the issue of ostensible authority comes up, one of the lines of defence can be "I never told them I had any authority they just wrongly assumed it.  Had I turned my mind to it or had I been asked I would have told them I didnt really have the authority and really they should get someone else to sign".  In other words, there can be a real issue on the facts.  One simple line of drafting can take away what can be a lengthy issue on the facts.

[Martinus]

If such extra wording is necessary under US common law, then I guess the law is pretty primitive and formulaic.

Marti, you are the guy who apparently lives in a jurisdiction that allows people to avoid contractual liablity by simply claiming the person who signed the contract didnt have the authority to do so.

I never said so. A person who purports to have an authority to sign a contract but doesn't is personally liable for any damage caused to the other party (and can also be criminally charged if this was deliberate). This liability however does not hinge on the fact that the person would say "Btw, I'm really me" (only in more words), however.