contract-law
Does &quot;shall&quot; in a contract preclude the other party from performing a task?
<p>Suppose I have a firm named Blue. I signed a contract with a firm, named Green, to manage our fleet of motorcycles. The contract states "Green shall solicit and negotiate contracts with qualified independent contractors approved by Blue owners for repairs to the property motorcycles".</p>

<p>Does that statement prevent our firm, Blue, from contacting and negotiating contracts directly with contractors to repair our motorcycles?</p>

<p>In other words, you are asking if the contract is exclusive.</p>

<p>My own opinion is that there is more than one fair reading of the contract language in isolation. One possible reading is that "for repairs to the property motorcycles" has an implied meaning "for repairs to all of the property motorcycles of Blue" and the other is that it has an implied mean "for repairs to all of the property motorcycles of Blue that it directs us to do work upon."</p>

<p>My first step to resolve that ambiguity would be to look at the definition of "property motorcycles" in the contract, and also to any other terms of the contract that would suggest that it is an "exclusive" contract as opposed to a master "supply" contract with an indefinite amount of work.</p>

<p>For example, if the price were a fixed one every month, not dependent upon how much work was done, that would tend to suggest an exclusive contract. Similarly, if the contract also contained a geographic scope or a non-competition term that would suggest that it was an exclusive contract.</p>

<p>On the other hand, if the arrangement were a fee for service payment and the mechanics under the contract of arranging for maintenance were such that this was really up to Blue, it might be read differently.</p>

<p>If the entire language of the contract read together left the ambiguity in place, it would be appropriate to look to extrinsic evidence such as the course of dealings of the parties and the discussions that went into negotiating the contract in order to determine the intent of the parties at the time that the contract was entered into in order to resolve that ambiguity.</p>

<p>It isn't at all uncommon for the meaning of a contract term in isolation to have more than one possible reading when taken in isolation. Often, it is necessary to refer to a greater context to describe its meaning. Sometimes, the overall context will even demand that a term in a contract be given the reading that is less plausible when it is read in isolation because the overall context of the contract manifests an intent and scheme that makes the more obvious reading a poor fit to the overall scheme of the agreement.</p>

<p>No: "Shall" asserts an obligation on named parties to do something.  It does not, on its own, preclude any other party from doing the same thing.</p>
