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.

#malaysiancorporatelawyer
#contractdrafting

First posted on Linkedin on 17 November 2021.

Due Diligence
Where Company Secretaries Make the Biggest Impact in M&A

At the heart of every legal due diligence for M&A transactions is verification of share ownership. One of the documents requested to verify share ownership is the register of members. It seems like a simple request, yet during some due diligence exercises, I have been provided with the following except …

Due Diligence
M&A Tip: Why Sellers Should Provide Share Ownership Documents (Not Just the CCM Search)

One of the biggest sources of delay in Malaysian M&A due diligence is surprisingly simple: Sellers often provide a company search from the Companies Commission of Malaysia (CCM) when what lawyers really need are the statutory share documents. A lawyer conducting proper due diligence will typically request documents such as:  Shareholders’ …

Lawyering
The Art of Track Change

One of the first things newly qualified lawyers learn (if they haven’t already) is how to use track changes in Word. It’s a simple but powerful tool. It lets the partner, the person reviewing their work, or the counterparty’s counsel quickly see what’s been amended. (In theory) it saves time, …