Corporate & Securities Law

?Mandatory?

By Ken Adams

The word mandatory can come in handy in contracts, for example in the defined term Mandatory Conversion, as distinguished from Voluntary Conversion.

But it can also be surplussage, in that if something is stated as an obligation, then necessarily it’s mandatory. That’s why I think mandatory can be omitted from the following examples:

The parties agree that all claims, disputes or controversies arising out of or relating to this Agreement that do not involve an action brought by a third party against either party shall be resolved and determined exclusively under mandatory mediation and arbitration procedures [read in accordance with this section 13].

In addition to the Scheduled Payments set forth in this Note, Borrowers will make each mandatory prepayment [read prepayment] of the principal of this Note required by the Credit Agreement, including, without limitation, the mandatory prepayments [read prepayments] of the principal of this Note in the form of Excess Cash Flow Payments in the manner and to the extent set forth in the Credit Agreement.

So you might want to think for a moment before using mandatory.

Full post as published by AdamsDrafting on September 01, 2010 (boomark / email).