The term vague is essentially used to allow for some small deviations after an agreement has been reached. For larger M&A transactions, various related contracts will be in place on the date of signature in an „agreed form” that may be entered into on the closing date of that transaction. An example of such an „agreed form” is often defined as follows: Do you qualify the term? It is not necessary to provide for a qualification of adequacy if European law were applicable. All European legal systems impose a certain standard of adequacy on contracting parties exercising their contractual rights. Nevertheless, The Parties welcome the explicit introduction of an adequacy standard. This is also desirable in modern common law systems, where the general principle of freedom of contract continues to enjoy considerable support[6]. For example, the most obvious example of vagueness is the word reasonable. It introduces an objective standard into the contract. The notion of „reasonable” limits the discretion or effect of excessively strict obligations. If it restricts the exercise of discretion, it requires that a party be able to declare its performance (or non-performance as intended). Where the term „reasonable” is included for the purpose of reducing the „hardness” of a strict contractual term, it introduces a reasonable approach to interpreting what can normally be expected from the performance of a party.
The standard of „reasonableness” is a standard that is usually determined by reference to a knowledgeable third party with the same expertise acting in the same circumstances. „Your power of conversation was considerable. They could describe a conversation accurately, tell an anecdote humorously, and laugh at their knowledge of the mind. Pride and Prejudice by Jane Austen The use of vague terms in contracts should not be confused with analytical and accurate writing. „Accuracy” requires not only the ability to distinguish between legal, factual, accounting, procedural and legal-procedural concepts. A competent lawyer should also identify the subtleties that arise from the negotiations. An experienced writer translates this into precise and accurate wording, incorporates aspects that fill in unfilled gaps, fails to clarify issues that have been intentionally left vague, and designs analytically using McKinsey`s MECE principle. Background. The concept of materiality is used to qualify sentences that would otherwise be too strict. It is often used in suspensive conditions and guarantees. Obviously, it takes from the framework of expression various intangible elements. The qualification material compares the simple formulation to the possible result if no materiality qualification has been used. Like reasonableness, the scope of a materiality classification would be determined by the party benefiting from the corresponding contractual provision.
It is usually the strongest contracting party. For example, if the closing of a transaction is subject to a condition precedent that no material adverse changes have occurred with respect to the target entity, any doubt as to the materiality of the adverse changes in the target entity`s business will be exploited by the strongest party to the transaction. (Often, compliance with a condition precedent results in a renegotiation of the terms of the contract and not a simple termination of the transaction as a whole. Indeed, in reality, conditionality is often included to attribute risk rather than giving a party the right to leave, although this may be a legitimate effect.) Matt Prater, who hasn`t proven himself, has a roaring leg on kickoffs, but his accuracy is the question mark. Use (2). Essentially, it is also used in meeting or release and most-favoured-nation clauses: under these contractual terms, a buyer can request price adjustments if the same goods or services can be purchased from a third party on substantially the same (or reasonably similar) terms to the seller. A concordance or release provision would give the buyer the right to terminate the supply of goods or services if the seller decides not to meet the conditions. A most-favoured-nation clause would allow the buyer to charge the lowest price the seller offers to its other customers (and sometimes even the lowest price available on the market). Needless to say, the application of this most-favoured-nation clause should be ensured by the right to inspect the seller`s books or to request a verified confirmation letter of the best price. 12 I consider this to be one of the messages of Fuller`s famous account of legality. Fuller, note 4 above; see also Dyzenhaus, loc.
cit. 6. accuracy, n.The Guardian, 4. December 2015: 1 definition found for this term. Definitions are presented in the order in which the source books were published (most recent first). Several „vague terms” are used in different typical contexts, but not always accurately.