United States: The Vices And Virtues Of "Notwithstanding"

Last Updated: November 3 2013
Article by Vincent R. Martorana

A contract that I recently analyzed and a blog post that I recently read gave me inspiration to do a post about notwithstanding. On a fairly regular basis, I encounter and employ notwithstanding in contracts. What does this potentially daunting word mean? I think of it as meaning "despite." Notwithstanding is used to create exceptions to rules in a contract or to circumstances or events. So, for example, suppose we have the following provisions in a sublease between Bert and Ernie:

Section 1. Ernie shall not annoy Bert.

Section 2. Notwithstanding Section 1, Ernie is permitted to annoy Bert on Christmas morning.

Here, the general rule is set forth in Section 1. Section 2, however, subordinates that general rule in certain cases (namely, on Christmas morning). Section 2 does this by using Notwithstanding. The provision is telling the reader (colloquially): Despite what I said in Section 1, here comes an exception.

There are other ways to convey exceptions in contracts (e.g., except and subject to), but I'll save the larger topic of exceptions generally for another blog post. For now, I'd like to discuss the virtues and vices of notwithstanding. Let's start with the vices.

The Vices

1) Confusion as to its meaning

The first issue with notwithstanding is its tendency to confuse readers. This is just about as lawyerly a word as you can get in contract drafting without straying into Latin. Ipso facto, it tends to confuse readers. I think it took me about two years of practicing law to be able to come across this word and not have to access the recesses of my brain to figure out what I was reading. Many people, in fact, confuse notwithstanding (which subordinates the text that immediately follows it) with its polar opposite, subject to (which elevates the text that immediately follows it).

2) It tends to subordinate rules that are not always readily identifiable

In our example above, it's clear which rule notwithstanding is subordinating because that rule is specifically referenced. But notwithstanding is often coupled with anything to the contrary in this Agreement. In other words, it often serves as an all-encompassing rule that trumps all. The "contrary" provision could be located in the immediately prior provision. Or it could be located 80 pages away.

Moreover, using notwithstanding in this context begs the question: what exactly in this Agreement is "contrary"? This issue arises with respect to exceptions generally (and will be the subject of a future blog post). But, when coupled with a broad notwithstanding anything to the contrary in this Agreement, the issue becomes magnified. The drafter had better have a firm understanding of what provisions are or might be contrary, or else be comfortable that the "trumping" rule being implemented really should trump all.

3) The battle of the notwithstandings

A related issue is that, in the throes of negotiating a 90-page document (or several 90-page documents), you end up with more than one all-encompassing notwithstanding rule. The question then arises as to which notwithstanding "wins." I'll post an example of this tomorrow, using our friends Bert and Ernie...

4) The problem of the foregoing

Notwithstanding also often gets coupled with the foregoing, as in: Notwithstanding the foregoing, the Seller is permitted to disclose the transaction to Bob. The foregoing means, more or less, "that which came before" or "the thing mentioned before." This can cause trouble in its own right, but is a pitfall that often arises when used with notwithstanding. For example:

Bill shall not disclose the existence of the time machine. Bill shall not disclose where Bill has been on Wednesday. Notwithstanding the foregoing, Bill is permitted to tell Ted that he has been to England.

Suppose that Bill visits medieval England on Wednesday. He can tell Ted that he's visited England on Wednesday. But can he tell Ted that he visited England in 1431 using his time machine? The last sentence wouldn't necessarily permit that conclusion; it's unclear "how far back"the foregoing"reaches."

The Virtues

Notwithstanding my commentary under the heading "The Vices" (see what I did there?), notwithstanding has its virtues. I've separated those out below in separate points, but the benefits are all interrelated and each has to do with practicalities rather than pure logic and precision. And each involves coupling notwithstanding with anything to the contrary in this Agreement when your client is the party that is the beneficiary of the trumping rule.

As such, Notwithstanding anything to the contrary in this Agreement can be useful in the following situations:

1) Your client needs a broad rule

In an ideal world, you'd know your contract inside and out. The contract would be free from ambiguity and would be perfectly easy to read. Moreover, all parties would have a clear understanding of how all of the provisions of the contract interact. While we strive for these characteristics in drafting, the practicalities of the day creep in and do so pretty quickly. We don't always have the time or money to analyze each provision of a contract or of multiple contracts to determine whether that provision should or should not be subordinated. And we might have a pretty clear directive that the exception is meant to be all-powerful. For example, if my client tells me that, above all else, the company cannot be liable for more than $50 million under the contract or with respect to matters relating to the contract, you can bet that I'll drop in a Notwithstanding anything to the contrary in this Agreement-type provision implementing that concept.

2) You know which provisions should be subordinated...and there are many of them

Suppose that you want to implement a trumping rule in your contract. Suppose, also, that you do in fact know your contract inside and out and have identified 23 provisions that need or might need to be subordinated, depending upon the circumstances. Rather than separately stating the 23 discrete provisions that should be subordinated, a Notwithstanding anything to the contrary in this Agreement might do the trick, especially if your client is the beneficiary of the trumping rule.

3) You'll likely need to subordinate additional provisions as negotiations proceed

If you know that more provisions are forthcoming in your contract and that those provisions will likely need to be subordinated to the general rule, then, rather than providing "subject to [trumping rule]" as each new provision is inserted, you might simply want to make your trumping rule apply notwithstanding anything to the contrary in the contract. Moreover, you might want to do this to also avoid a negotiation with your counterparty as to whether a given provision does or does not require subordination. And, as a practical matter, once you've gone the route of using subject to to subordinate provisions, it might be difficult later on to reverse course and implement a notwithstanding anything to the contrary in this Agreement approach.

The Conclusion

In the end, I tend to stay away from notwithstanding. It's more verbose than other methods of subordinating language, and, when coupled with anything to the contrary in this Agreement, it can affect provisions without warning. Moreover, it can give rise to ambiguities. That being said, I do tend to use notwithstanding from time to time. But I do so consciously and for practical purposes. Specifically, notwithstanding anything to the contrary in this Agreement can be particularly useful if your client is the beneficiary of the trumping language, if you and your client are confident that the trumping language should apply in all cases, and if you are concerned about not "catching" one or more provisions that should be subordinated.

This article is presented for informational purposes only and is not intended to constitute legal advice.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions