Using ‘will’, ‘shall’ and ‘must’ in commercial contracts


Posted by Elisabeth Bell, 24th March 2016
Winston Churchill declared that, “We shall fight on the beaches” – not ‘must’ or ‘will’ – but ‘shall’.
‘Shall’, ‘must’ and ‘will’ are all modal verbs (verbs used to express an obligation). In a commercial contract setting, you want to be sure that the strength of obligation agreed by the parties is reflected in the agreement.

Traditionally, conventions dictate that:

  1. ‘Will’ when used in the first person, conveys an obligation, whereas ‘shall’ merely a future intention.
  2. Conversely, when used in the second or third person, ‘will’ conveys a future obligation, whilst ‘shall’ imports compulsion and obligation.

Churchill’s dicta (“We shall fight on the beaches”) is a helpful way to remember this.

But inconsistent drafting means that one cannot rely on the traditional interpretation; terms needs to be read in the context of the overall agreement applying the usual (and common sense) principles:

  1. what is the natural and reasonable meaning of the clause?
  2. what did the parties intend?
  3. what makes (commercial) sense?

What about ‘must’? Interestingly, English legislation avoids the use of ‘will’ or ‘shall’ in favour of ‘must’. ‘Must’ always suggests an absolute obligation.

Needless to say, ‘may’ suggests discretion (‘we may fight on the beaches’ conjures up quite a different image). The same applies to the combination of ‘shall and may’.

So, which modal verb to use? In reality, it’s unlikely to make a significant difference to your contract, provided that the intended consequence is clear. But to avoid finding yourself in the minority of cases in which your agreement is subject to close scrutiny, ‘must’ provides the safest, most definitive drafting route to capturing your intended absolute obligation.

Churchill’s finer oratorical moments, however, are probably best left alone (together with Georges Clemenceau’s June 1918 speech, in which he went with ‘will’ (“I will fight in Paris”).

 

Enjoy That? You Might Like These:


articles

20 November - Charlotte Boatman
The Law Commission has confirmed that electronic signatures are a valid means by which to execute documents. A report published by the Law Commission on the "Electronic execution of documents"... Read More

articles

7 November - Sophia Keen
Our Commercial Litigation experts provide a summary of the key points of the capped costs pilot scheme and whether it will work for you. The capped costs pilot scheme was... Read More

articles

5 November - Simon Hough
Simon Hough and Rebecca Wyke discover good news for litigation funders as they examine a recent Competition Appeal Tribunal ruling in relation to the funding of collective claims. The case... Read More