What do all capital letters in legal documents signify?

November 22, 2006 7:06 AM

What do all capital letters in legal documents signify? Many legal documents contain stretches of normal text alternating with stretches that are in all-caps. Is there a legal meaning to it? What would be the ramifications of printing the all-caps portion in normal capitalization - i.e., could that render the document ineffective?
posted by dmd to Law & Government (8 answers total)

Some laws require that certain provisions of contracts be printed in a font that is larger than the remainder of the text, or in all caps, to avoid burying important terms in a bunch of small text. Ostensibly these laws are designed to protect consumers from being surprised by hidden terms. For example, the Uniform Commercial Code, adopted by virtually all the states, requires that certain provisions of contracts governed by the Code be rendered "conspicuous:"

"Conspicuous", with reference to a term, means so written, displayed, or presented that a reasonable person against which it is to operate ought to have noticed it. Whether a term is "conspicuous" or not is a decision for the court. Conspicuous terms include the following: (A) a heading in capitals equal to or greater in size than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same or lesser size; and (B) language in the body of a record or display in larger type than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same size, or set off from surrounding text of the same size by symbols or other marks that call attention to the language.

U.C.C. § 1-201(10).

Some contract drafters also user ALL CAPS to designate defined terms, or the names of parties to the contract.
posted by monju_bosatsu at 7:16 AM on November 22, 2006

Sometimes when a word or phrase is put in all-caps in a legal document it's because there's a particular definition for that word or phrase that is set forth toward the beginning of the document. In that situation, I don't think switching the caps would change the meaning of the document (I mean, I think the definitions at the beginning would still apply).
posted by ClaudiaCenter at 7:19 AM on November 22, 2006

A good example of what you are talking about comes from contract law regarding any contractual language that disclaims warrantee. Warrantee is implied in any sale unless disclaimed. If you are going to disclaim, the language must be “conspicuous.” That requirement has been understood by lawyers to mean that the language must be easily visually identifiable. There is no regulation saying it has to be bolded. The rule is a common law rule, or judge made rule. The rule arose in response to problems with hidden disclaimers.

Business lawyers started bolding in order to be able to demonstrate to any court that might inquire that the language disclaiming warrantee was “conspicuous.” I am not aware if there is a formal legal test defining if language is “conspicuous” or not.

To answer you questions; the lack of bolding or capitalized type is not necessarily a problem. The issue would only come up if there was a lawsuit regarding the Warrantee language. In the case of a lawsuit, the Judge has pretty wide latitude do determine if the language is sufficient. If you want to get really deep about your inquiry, I would recommend looking into the commentaries provided in the applicable section of the Uniform Commercial Code (UCC), or look the topic of Disclaimer of Warrantees in the Restatement of Contracts.. I’d site the UCC section number for you, but I do not have my copy with me a work.
posted by BeerGrin at 7:24 AM on November 22, 2006

After looking above: listen to monju_bosatsu, he's the man.
posted by BeerGrin at 7:24 AM on November 22, 2006

There is also the specific case of the disclaimers used in securities offerings which are often the subject of state law - in particular there's a New Hampshire law which specifies the size, font and position of the disclaimer which must be in all securities offerings even though it's applicable only to NH residents.

ClaudiaCenter: that's not the case - if a term is defined with an initial capital or in all caps then using it a different way will likely be construed as meaning something else (the logic is that if "meaning X" is associated with particular "formatting X" of a word then the court will imply that you used "formatting Y" because you explicitly didn't want it to have "meaning X")
posted by patricio at 8:37 AM on November 22, 2006

In Texas, the Public Utilities Commission goes so far as to define the minimum font size (and weight) used in certain communications, for instance:

Every deferred payment plan offered by an electric utility:
(A) shall state, immediately preceding the space provided for the customer's signature and in boldface type no smaller than 14 point size, the following...

Courtesy of PUC Substantive Rule §25.28(i)(4) [PDF].
posted by lowlife at 10:05 AM on November 22, 2006

Sometimes the law requires it, sometimes it's the typographical equivalent to legalese.
posted by footnote at 11:49 AM on November 22, 2006

When I used to develop legal documents (always with advice from counsel, as IANAL) I used to do just what many have said: use CAPS to denote certain terms that have specific and important meanings within the document -- GRANTOR, GRANTEE, PROJECT, REPORT, etc. Our lawyers always appreciated it. In our case it was simply for clarity and convenience, not because it was required.

What would be the ramifications of printing the all-caps portion in normal capitalization - i.e., could that render the document ineffective?

This sounds like the argument that says that income taxes are invalid because the state house has a flag with gold fringe or something.
posted by Rock Steady at 1:07 PM on November 22, 2006