Consistency in drafting

Consistency.

Consistency matters a lot when drafting agreements.

I was half amused and half exasperated when I saw an amended draft shareholders’ agreement which stated that shareholders may exercise certain rights by giving notice to the other shareholders. The next clause stated that the shareholders shall give notice to the board who will then give notice to the other shareholders to exercise the rights.

Inconsistency usually arises when drafts are amended multiple times and the drafter does not realise the newly amended Clause 5 in the sixth draft is inconsistent with Clause 6 which has been there since the first draft.

#malaysiancorporatelawyer
#mergersandacquisitions
#shareholdersagreement

This post was first posted on Linkedin on 5 November 2022.

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