Monday, August 11, 2003

THAT THAT IS THAT IS NOT THAT, WHICH IS THAT Why is it that the hardest thing (apparently) for lawyers to learn is the difference between the use of "which" and "that"? Transactional attorneys certainly love to use "which" when trying to define, expand or limit a phrase, and they use it all the time. Here's a simple rule to remember, "that" limits or modifies the term that it modifies and is essential to its definition. "Which" is not limiting or definitional, but surplusage. Ask yourself this when you can't decide. If you take out the "which" clause, will the applicable contractual provision have the same meaning? Here's an example:
No Litigation has been commenced which, if successful, would have a Material Adverse Effect
The author should have gotten a little concerned when she chose not to place a comma before "which". So, what does this mean? Is it a representation that there is no Litigation at all, or only that there is no Litigation of a certain type. Under a grammitical reading, the Borrower has just told the Lender:
No Litigation has been commenced
Borrower's counsel should insert "that" in place of which.
No Litigation has been commenced that, if successful, would have a Material Adverse Effect.
Thus, the Borrower now represents that there may very well be some Litigation out there, but if there is, it won't have a Material Adverse Effect on the business if the plaintiff wins.

No, Lenders and Buyers aren't trying to pull a fast one, and I would think that a court would interpret the provision more in line with what the parties intended, but there are times where using "that" and "which" appropriately can clarify meaning. At the very least, lawyers who spend there days with words, clarifying meanings and limiting definitions, should get this very basic distinction correct.

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