Be careful with the word “notwithstanding”

Drafting
Drafting

Be careful when using the word “notwithstanding” in an agreement.

Say you are preparing a supplemental agreement to substitute a clause. The substitution clause set out the rights of holders of a class of shares. You double check and triple check the substitution clause to ensure it contains all the rights you want to include.

But guess what? Buried somewhere in the main agreement is a clause that says “Notwithstanding anything to the contrary in this agreement… ” followed by something that is inconsistent with what you have just drafted.

When drafting an agreement, be careful with clauses that contain the word “notwithstanding”. A clause with that word is meant to take precedence over other clauses.

You may have just drafted an agreement which give corporate lawyers headache during legal due diligence.

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First posted on Linkedin on 17 November 2021.

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