After having given it considerable thought, Michalsons have
decided not to use capital letters for defined words in our
Reasons for not using capital letters
These are some of our reasons for doing so:
It follows the plain language principle that capital letters in
mid-sentence create 'visual hiccups' (Garner)
that hinder reading and understanding, and should be avoided as far
There is generally less scope for ambiguity or
misunderstanding if defined terms are always lower case in
inconsistency is a major factor in creating
confusion, ambiguity and legal uncertainty: for example where the
term is supposed to have an initial capital but because of
carelessness or typo it does not. This kind of inconsistency is
inevitable and very common.
Sometimes it is unclear if the term is perhaps defined
elsewhere. For example in an annexure or schedule. In our
experience, a term like 'Limit of Liability' will appear in
the text in one section where it has not been defined, and then
appear as 'Limit of liability' or 'limit of
liability' (or 'limit of indemnity' or 'limitation
of liability' and various other permutations) in the same
section, other sections or elsewhere in the same policy, with no
apparent logic. In another section it will be defined, but referred
to in lowercase or inconsistently.
Interpretation problems and ambiguities generally occur most
where common terms with a widely understood plain language
meaning (such as 'accident' or 'damage')
are given specific technical definitions that apply to one section
or sub-section of a contract but not others.
Rather than use capital letters for defined words our approach
is either to:
remove the definition (if not strictly
necessary, which it seldom is) and clearly 'describe' the
intended application of a common word in a particular context
rather than define it (in a formal legal sense); or
change a definition to operate more like a
condition or term that applies to that section only,
without changing the meaning of the ordinary word and opening up
potential interpretive loopholes; or
if the term has to be defined, change it to something
with some specific descriptive content rather than a common general
meaning. For example change 'Damage means...' to
'Fire-related damage means...'. Then, wherever
'fire-related damage' appears in the text, it cannot easily
be interpreted in any other way in that context.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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