Drafting lessons learnt from the common law approaches to statutory interpretation
The well-established rules our judges apply to statutory interpretation can help shed some light on why we should abandon all uses of “shall” in modern contracts. (These rules are the golden rule, the literal approach and the purposive approach, which I will not discuss in detail here.) The three key takeaways here are ordinary meaning, intention and purpose. When you draft a contract and want to use “shall”, think carefully. Unless the use of the word satisfies these three tests, abandon the word and replace it with another word.
More reasons for never using “shall”
“Shall” is a chameleon. “Shall” has four meanings in the Macquarie Dictionary and five meanings in Black’s Law Dictionary. It can be used to impose an obligation but it can also be used for other purposes, for example, to express the simple future tense. “Shall” is also not a commonly used word. It is archaic. It is what Shakespeare and Dickens would have used. Black’s Law Dictionary pointed out that only one of the five meanings of “shall” is acceptable under strict standards of drafting – “shall” means “has a duty to”.
Indeed, many people do consider, at least in the traditional use of the word, that “shall” (and “shall not”) indicates obligation, and in comparison, “may” indicates discretion. But this is not always true, as you will see from the case below. And this is precisely why the word “shall” should not be used in modern contracts.
BW Gas AS v JAS Shipping Ltd  All ER (D) 134 (Feb) is a UK Court of Appeal (Civil Division) case. The case considered a bareboat sub-charter of a new vessel that required it to be built in accordance with a building contract. The court found that although the contract provided that the buyer “shall” supply particular items for installation, the contract had not been breached by failure to deliver the vessel with the items installed, as it had not been mandatory for the buyer to supply. Although this case is a UK case and can be limited to its particular circumstances, the confusion created as to whether or not “shall” imposed a mandatory requirement is a very good reason for never using that word.
How to draft a shall-less agreement
Use “must” to express an obligation because the meaning is clear and it is a commonly used word. In Australia, this is the rule invariably applied by judges, and is supported by the Government as well as legal commentators. Similarly, do not use “will”. This word can be used, and often is used, to express the simple future tense. If an alternative to “must” is really necessary, try using “agrees to” or “is required to”.