Corporate & Securities Law

?Books and Records??

By Ken Adams

Reader Macy Shubak recently asked me the following question:

How do you feel about using “books and records” as in “Investor may inspect the Company’s books and records”? I think one or the other of the words can be deleted. It would be better to delete “books,” since “records” is broader. ”Records” includes physical and electronic records, whereas “books” sounds like hard copy materials. I think “books” is a term of art that refers to financial books, but I still think referring to “records” alone would pick up such financial books.

Essentially, I agree with Macy. Here’s why:

Let’s consider first the meaning of books. It could mean corporate books, which Black’s Law Dictionary defines as “Written records of a corporation’s activities and business transactions.” But that doesn’t pick up the financial aspect that Macy mentioned. In that regard, a better bet would be books of account, which Black’s considers to be a synonym of shop books, which it defines as “Records of original entry maintained in the usual course of business by a shopkeeper, trader, or other businessperson.”

So records is ambiguous, in that it has a broader meaning and a narrower, bookkeeping-related meaning.

Now let’s consider records. Black’s doesn’t offer a definition of records?it’s too general a word. But for our purposes, all that matters is that both definitions that Black’s offers for books lead with the word records. So whatever meaning you might ascribe to the word books, books constitute records. It follows that in the phrase books and records, the word books is redundant.

This doesn’t come as a surprise. In “material contracts” filed on the U.S. Securities and Exchange Commission’s EDGAR system, the phrase books and records occurs more than four times as often as the phrase records and books. When one way of ordering the words in a couplet predominates over the other way, that suggests that the the phrase is used as much for purposes of incantation as for whatever meaning the individual words might convey.

Full post as published by AdamsDrafting on September 14, 2010 (boomark / email).