Canopy Law > Shareholder Agreements > Why to avoid ambiguity at all costs

Why to avoid ambiguity at all costs

‘So, when you said “help yourself to tea and coffee” you didn’t mean I could take the Nespresso machine home with me? Ok… what about the little pods?’

Life is full of ambiguities; we all talk in generalities, often using common phrases, similes and bewilderingly mixed metaphors that we expect others to be able to interpret correctly. Everyday language is hugely creative, and while that makes it interesting, it does leave the door open to confusion. There is no room for this in a Shareholder Agreement. The language should be plain, to the point and leave no room for future misunderstanding or difference in interpretation. That is, after all, one of the Shareholder Agreement’s primary functions. A Shareholder Agreement open to interpretation will benefit no one other than your lawyers… and, potentially, their plans to build a holiday home in the south of France.

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“A good Shareholder Agreement is like a fence at the top of a cliff, which stops company owners from falling over the edge and into the hands of lawyers who wait in the ambulance parked beside the rocks below.

This book explains in easy to understand language what a Shareholder Agreement does, the common clauses it contains and when it is best to put one in place.”