![]() There are two ways a drafter can use a ‘checklist of the categories of contract language’: If so, the contract could set out the consequences of an invoice being issued after a certain date. ![]() ![]() So the supplier’s discretion should only arise following an agreed trigger point (month end, received order, delivery etc.) In some circumstances, the buyer might want protection against an invoice being issued very late. From the buyer’s perspective, it doesn’t want the invoice issued earlier than expected. Of course, the supplier has a commercial incentive to do so at the earliest opportunity, but there are many factors which can result in an invoice being delayed. Invoicing is something which a supplier chooses to do. In these circumstances, it might be important for the buyer to have each invoice arrive by a particular time.īut, more generally, I find the language of discretion to be the category which reflects the reality of the situation. Where the issuing of invoices forms part of a broader chain of events or interconnected supplies, the language of obligation seems appropriate. In order to protect the benefit of a favourable invoicing arrangement, I think the declaration needs to come from the supplier – as Vance Koven suggests. If the invoicing arrangement is favourable to the buyer (by being monthly in arrears), then a declaration from the buyer might leave the buyer without a clear right to refuse an invoice which is issued earlier. (For the complete analysis of the categories of contract language, see chapter 3 of A Manual of Style for Contract Drafting.) Categories Categories of Contract Language Of course, you won’t find a single contract that uses anything like this, but that certainly doesn’t worry me. Instead, it’s a function of Widgetco’s invoicing system. It reflects the reality that Widgetco’s invoicing of Acme isn’t something unique to this transaction. Language of declaration: Acme acknowledges that Widgetco invoices purchasers of widgets monthly in arrears.īoom. And more to the point, it would be odd to have a condition to validity be the only way you address invoicing. Language of obligation used to express a condition: For Widgetco’s invoices for purchases under this agreement to be valid, Widgetco must issue them to Acme no sooner than monthly in arrears. By contrast, invoicing requires party action. Language of policy (using will) is for stating the ground rules of a contract-stuff that is or will be, without anyone’s intervention. Language of policy: Widgetco will invoice Acme monthly in arrears for purchases under this agreement. That’s not right either, as it suggests that each month Widgetco might say to itself, Yes, Acme owes us money, but do we really want to issue an invoice this month? Instead, invoicing is a matter of routine. Language of discretion: Widgetco may invoice Acme monthly in arrears for purchases under this agreement. That doesn’t make sense, as it suggests that Acme could bring a claim for breach if Widgetco doesn’t invoice Acme monthly. Language of obligation: Widgetco shall invoice Acme monthly in arrears for purchases under this agreement. For a while now, I’ve asked myself what category of contract language to use when providing for one party to invoice the other.
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