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

‘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”).