Promptly

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Where an obligation must be performed “immediately”, do we lose anything by yielding to the opposition’s request to demote that to “promptly” or “as soon as reasonably practicable”?

Chicken lickens may be aghast, but your old contrarian pal says “no”.

In the event that Party B [a fund] makes any material changes to its investment policies it shall be obligated, immediately as soon as reasonably practicable, to notify Fund [its broker].

What does “immediately”, as used here, even mean? Do we expect poor benighted fund to be in fundamental breach should it fail to advise its broker at the utter microscopic instant, measured upon an atomic clock, that the change is formally approved in the institution’s minutes?

No? Then within what period can one dither and still be thought of as sufficiently in the moment to be “immediate”?

Surely a fund needs some time to collect itself, canter back to the office, fish out its Rolodex, find its broker’s number, clear its throat, wait for its relationship manager to pick up the line and exchange some pleasantries before imparting this vital news. If so, you might ask yourself just how different that sense of “immediately” is to “as soon as reasonably practicable”, or even “promptly”.

Not very, is your correspondent’s opinion.

In any case, even where aggrieved, indignant broker is gagging to close out its poor client — and there is rarely unanimous conviction on such a thing inside a broker at the best of times — unless it is possessed of some unnatural intelligence as to the fund’s internal workings — and, when it comes down to it, even then — the covenant is practically unenforceable in any case.

Here are the possible scenarios after, for example, a fund changes its investment policy in ostensible transgression of a commitment not to do so without telling its broker:

Fund does not tell its broker at all

1. The broker never finds out

The fund has breached its covenant, but its broker cannot know this, so is in no position to take any action. Hard cheese, broker!

2. The broker does find out

The fund has breached its contract, its broker knows this but, precisely because the broker knows about it, no particular harm done. The broker is no worse of than had the fund told it, and cannot really suffer any loss as a result.

Fund does not tell Party B at first

3. The broker has not found out yet

Same as 1: To paraphrase Terry, head cook at Fawlty Towers, the eye is not seeing, so the chef is getting away with it.

4. The broker funds out eventually

Same as 2. By the time the broker finds out, the contract has both been breached and remedied, so it is hard to see what action lies.

“Immediately” might look severe, but it does have a handsome economy quite lacking from “as soon as reasonably practicable”. But not as much as “promptly”.

See also

• The difference between practical and practicable.
• As soon as possible but in any event not later than
• What the eye don’t see the chef gets away with