Contract Drafting

Did You Really Notice the Notice Provision?

November 21, 2022

Most likely you skipped right over all of those sections at the end of the contract. You know, the ones that you probably call “boilerplate” (that’s what lawyers call them, too).

Most people think that boilerplate is just extra stuff that lawyers toss in. Longer contracts mean more fees, right?

But boilerplate isn’t “extra stuff” at all; in fact, it’s the exact opposite: boilerplate got its name because it provides a protective layer around the rest of the contract, provisions design to help you sure that you get the deal that’s laid out in the deal-related provisions of the document.

Despite the mini-law school lesson above, there’s still a chance that most people gloss right over the boilerplate in an agreement. No, I know that’s not you, but just in case you forward a copy of this blog post to someone else, let’s talk about one of the provisions that is far more important than it appears, the notice provision.

The notice provision is, as its name indicates, the provision describing who gets notice, how that notice must be delivered, and how much notice (i.e., how much time) must be given in order to trigger certain events under a contract, such as giving notice of breach and triggering the allotted time to cure.

In my opinion, there’s no such thing as a standard notice provision. Let’s play with some, but by no means all, of the alternatives and see what you think.

1. Who gets notice? The parties alone or the parties plus someone else, say their legal counsel? If it’s to the parties plus someone else, must both actually be sent the notice or is it that notice to one is required but that the second receives it as a courtesy?

2. If the parties are entities, is notice addressed to the entity itself or to a particular person?

3. How is notice to be sent? By regular mail? By some type of special mail such as registered? By overnight courier such as FedEx? By email? By in person delivery? By more than one method? “Has the analysis changed since the beginning of the Covid pandemic? (No, but it took the pandemic for most to do the thinking.)

4. Is notice effective when it is dispatched or when it is received? What does “received” mean, actual receipt or deemed receipt? What about the kind of provision that says that notice sent by US Mail is effective, say, three days after mailing? It once took over a month for something mailed from our Santa Barbara office to reach the Dallas office—if that were a mailed notice, was I supposed to guess that it was sent and what it stated while it sat in some corner of the post office?

5. Do your answers change depending on whether you think you are the one more likely to receive a notice or the one more likely to send it? Do your answers change depending on what sort of notice you’re most likely to receive or to send? The answers are likely “yes” and “yes”.

We could go on, but this isn’t a post about contract drafting. Instead, it’s a reminder to make sure that you engage in meaningful conversations with your legal counsel over all of the elements of an agreement, not just the ones that say that someone is going to pay you $120,000 a month as a management fee until further notice – oh, you probably noticed that notice bit.

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