Jay Parkhill February 8th, 2008
Why is it that certain parts of most commercial-type business agreements have sections written in ALL CAPITAL LETTERS? Don’t the lawyers who wrote it know they are shouting?
The answer is mundane, a little unsatisfactory and pleasantly simple all at the same time. Commercial arrangements in the U.S. are governed by and large by the Uniform Commercial Code, a set of model laws prepared by a national conference of experts and adopted- more or less verbatim- by each state.
Article 2 of the UCC covers sales agreements. Among other things, it says that when goods are sold, there is an implied warranty that the goods are “merchantable”, or of decent quality.
Further, the article says that any limitations on this warranty must be CONSPICUOUS.
All caps is the practical way of satisfying this requirement. While the SEC and others in the Plain English camp might argue that putting complete paragraphs in capital letters actually lessens readability, we can be thankful that this not the accepted view. The alternative might be to put the language at the top of the agreement, or under separate signature, or otherwise turning the conspicuousness requirement into a nuisance.
Happily, the conference of delegates, courts and wise heads everywhere reached the sensible conclusion that capitals got the job done so that we could all move on to more important matters such as making the documents actually facilitate the transactions to which they relate.Tags: legal
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