Contact us with your California corporate & securities law questions (949) 353-6347 or Contact us here

When Shall/Will/Must/May We Meet Again?

Lawyers are very fond of using the word "shall" in articles of incorporation, bylaws and agreements.  Using "shall" instead of "will" seems to add a certain level of formality (or perhaps pretension).  It may also be intended to convey the meaning that something must happen and not simply that it may happen in the future.

Indeed, there is an etymological basis for a distinction between "shall" and "will".  Both are Old English words: "shall" is derived from sceal meaning to owe while "will" is derived from from "willan" meaning to desire or wish.

Although "shall" is a perfectly fine word, I'm trying to eschew using it in legal documents.  In my view, it has the potential for ambiguity.  As a test, take a set of bylaws and then try to substitute "will", "may" or "must" for "shall".  For example, a bylaw might provide that board meetings shall be called by the Chairman of the Board, the President or any Vice President.  This doesn't mean that these individuals must call special meetings - only that these are the persons that may do so.  Another bylaw may provide that expenses incurred in defending a proceedings shall be advanced.  Here, the intent is likely to be that the corporation must do so.

The California Corporations Code doesn't leave the meaning of "shall" to chance.  Section 15 provides: ""Shall" is mandatory and "may" is permissive."  Thus, Section 307(a)(1) provides that board meetings may (not shall) be called by the chairman, president etc.

Nevada's legislature has prescribed an even more elaborate set of rules.   Under the Nevada Revised Statutes, unless a particular statute expressly provides otherwise or required by context, the following rules apply:

  • “May” confers a right, privilege or power.
  • “is entitled” confers a private right;
  •  “May not” or “no * * * may” abridges or removes a right, privilege or power.
  • “Must” expresses a requirement when: (1) the subject is a thing, whether the verb is active or passive; or (2) the subject is a natural person and (a) the verb is in the passive voice; or (b) only a condition precedent and not a duty is imposed;
  • “Shall” imposes a duty to act;
  • “Shall be deemed” or “shall be considered” creates a legal fiction; and
  • “Shall not” imposes a prohibition against acting.
NRS 0.025(1).  For a further explanation of these rules, see Section 2.4 of Bishop & Zucker on Nevada Corporations and Limited Liability Companies.

It turns out that the confusion over the proper use of "shall" and "will" is longstanding.  I recently came across Grammatica Linguae Anglicae which was published in 1653 during England's short-lived Commonwealth.  This book is unusual in many ways.  It is a book on English grammar, but incongruously it is written in Latin.  The author, John Wallis, moreover, was a mathematician and cryptographer, not an English professor.   Below is the original text with my translation:

Quoniam autem extraneis satis est cognitu diffficile, quando hoc vel illud dicendum est (non enim promiscue dicimus shall et will); neque tamen alii quos vidi ullas tradidere regulas quibus dirigantur: has ego tradere necessarium duxi; quas qui observaverit hac in re aberrabit. Since it is hard enough for strangers to know, when this or that must be said (for we say “shall” and “will” indiscriminately); Since I have not seen others to put forth any rules: I have thought it necessary to deliver these [rules]; he who will have observed these rules, will not err.
In primis personis shall simpliciter praedicentis est; will quasi promittentis aut minantis. In the first person, “shall” is simply speaking of the future; “will” is as if promising or threatening.
Uram, ures, uret; uremus, uretis, urent: I shall burn, you will (thou wilt), he will, we shall, ye will, they will, burn; nempe hoc futurum praedico: vel I will, you shall (thou shalt), he shall; we will, ye shall, they shall, burn; nempe, hoc futurum spondeo, vel faxo ut fit. [When I say] “I shall burn, you will (thou wilt), he will, we shall, ye will, they will, burn”; I simply predict the future.  On the other hand [when I say], “I will, you shall (thou shalt), he shall, we will, ye shall, they shall, burn” I promise the future or I make it so that it will be.

H.W. Fowler in Fowler's Modern English Usage also notes a difference in meaning based on whether the person is first, second or third (I, you, or he or we, you, or they).  However, he notes that in this case "the English of the English differs from the English of those who are not English".  Thus, a reader's understanding of "shall" and "will" may depend on where she learned English.

In writing about "shall" and "will", my goal isn't to settle the language debate but to alert readers to the fact that in the California Corporations Code (not simply the General Corporation Law), the word "shall" has a statutory meaning.  Similarly, "shall" and related terms are defined in the Nevada Revised Statutes.  Finally, parties often use "shall" in different ways within the same contracts.  This creates ambiguity that can be easily avoided by assigning a definition to "shall" for the purposes of the contract or substituting other words such as "must", "may" and "will".

Share on:

ANY QUESTIONS REGARDING CALIFORNIA CORPORATE AND SECURITIES LAW? CONTACT US DIRECTLY

We offer expert advice with the intricacies of California law.

Our years of experience and expertise allow us to help clients navigate the business laws in California.

CONTACT US

Get the latest news and analysis about California Corporate & Securities law. Subscribe to our newsletter today!

We respect your email privacy

ABOUT OUR AUTHOR

30172DBAB0084D3A8F39D7AF0A8E79BC.ashx Keith Paul Bishop
Partner at Allen Matkins
(949) 353-6328
 Contact me
Learn More About Keith

nominee-badge

Get the latest news and analysis about California Corporate & Securities law. Subscribe to our newsletter today!

We respect your email privacy

CATEGORIES

see all

RECOGNITION

YOUTUBE

FACEBOOK