The risks of adding random “except as otherwise provided” in your contracts

May 22, 2024

“Except as otherwise provided in this Agreement,…” is a favorite of many lawyers, but I’ve found it often used in a confusing and vague way.

Think for a minute about how broad that language is. Adding this phrase means whatever statement or obligation follows is now secondary to some other unknown provision elsewhere in the contract.

Now, I have no problem if we reference a specific provision (“Except as provided in Section 1.2”). We can agree a particular provision should trump another one. Or if there is only one interpretation.

But in many cases, this phrase is randomly dropped in a place it doesn’t belong. This approach is extra problematic when used with provisions critical to the risk allocation.

I had one memorable negotiation in which the other side wanted to add “Except as otherwise provided in the Agreement” before the consequential damages waiver.

I asked the counterparty, “Where in the agreement is it otherwise provided?” The lawyer couldn’t identify a place but thought it was a good idea “just in case.”

Ugh.

Avoid random insertions of this phrase where it doesn’t belong.”

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