Yesterday the Supreme Court of Texas ruled that the term will, in context, did not establish a contractual obligation, but merely stated the intent of one of the parties. A dissenting justice disagreed vigorously. This suggests that it might be well to define the term will as signifying a mandatory obligation, using the Common Draft definition.
The Texas supreme court case was Lubbock County Water Control & Improvement Dist. v. Church & Akin, L.L.C., No. 12-1039 (Tex. July 3, 2014) (reversing court of appeals and dismissing claim for want of jurisdiction). The water district had signed a lease agreement under which a private company would take over operating a public marina on a lake and pay the county a nominal fixed rent plus a percentage rent. The water district terminated the lease early; in response, the company sued for breach of contract. The issue was whether the company’s claims were barred by governmental immunity — the supreme court said yes, they were indeed barred — or whether instead the contract in question came within a statutory waiver of immunity for contracts to provide goods or services to the government.
In response to an argument made by the company, the supreme court focused on the following language from the contract: “The marina will issue catering tickets that will be redeemed at the gate for admittance to the lake. …” Id., slip op. at 13 (emphasis added). The court said that in context, “we read the provision as expressing the parties’ acknowledgment of Church & Akin’s intent to issue tickets, not as a contractual promise to do so.” Id. at 15 n.10 (emphasis added). For that among other reasons, said the court, the contract was not one to provide services to the water district, and so governmental immunity was not waived. The dissent argued that “[i]n this context, ‘will,’ although it has many possible meanings depending on context, here indicates a mandatory requirement.” Dissent at 5 (footnote omitted). In the dissent’s view, the contract clearly was one to provide services to the water district, and thus immunity was waived. See id. at 9.
Even after this decision, I still prefer using the term will, not shall, to state contractual obligations. My on-line friend Professor Tina Stark (whose book I use in my course) disagrees , as does Ken Adams, author of A Manual of Style for Contract Drafting . Nevertheless:
- Contracts should be in plain, contemporary English wherever possible, but the term shall carries the faint whiff of musty, archaic legalese. When I read sentences such as Party A shall take Action X, it makes me think of my late grandmother, who would say things such as, “I shall have a cup of tea.”
- The term will has a more-collaborative feel to it, and less of a master-servanty tone, than shall. That, I think, can provide just a smidgen of help in achieving two goals: (1) Establishing a cooperative attitude among the parties, which can be important to a successful long-term relationship or even to just a one-shot transaction; and (2) getting the parties to signature, as I discussed in Shall versus will: A sales-related reason to use the latter.
- I’m given to understand by foreign counsel that, in some English-speaking countries, the term shall might be construed as tentative or optional, not as mandatory.
In view of this Texas case, however, I’m going to seriously consider including the Common Draft Will-as-Must Definition clause in more contracts:
Unless the context clearly requires otherwise, terms such as “Party A will take Action X” mean that Party A is required to take Action X”; likewise, “Party B will not take Action Z” means that Party B is prohibited from taking Action Z.
While it might seem like overkill to include this clause, it also might be one of those cases where a few extra words can be cheap insurance.
 Tina L. Stark, Drafting Contracts: How and Why Lawyers Do What They Do ch. 13 & § 10.2.1 (2d ed. 2014).