Manner of exercise: Overview, definition, and example
What is the manner of exercise?
Manner of exercise refers to the specific way in which a party is required to exercise or carry out a particular right or option as outlined in a contract. It specifies the process, steps, or conditions that must be followed in order to properly exercise a right, fulfill an obligation, or invoke an option under the terms of the agreement. This could involve how, when, and in what form a party should communicate their intention to exercise certain rights, such as options, buyouts, or other privileges.
In contracts, the manner of exercise ensures clarity in how certain actions are to be taken and reduces the risk of disputes by detailing the procedure for invoking rights, including time limits, required notices, and other procedural steps.
Why is the manner of exercise important?
The manner of exercise is important because it establishes clear guidelines for how parties can exercise their rights or perform certain actions under the agreement. Without these specifications, one party might incorrectly assume how to exercise a right, leading to misunderstandings, delays, or even breaches of contract.
For businesses, specifying the manner of exercise helps to avoid disputes and ensures that rights are exercised in a timely and effective manner. It provides both parties with a clear understanding of what is required to activate rights, such as the right to terminate an agreement, extend a deadline, or exercise an option to purchase.
Understanding manner of exercise through an example
Imagine a company enters into a contract with an option to purchase additional shares at a specified price at a future date. The manner of exercise in the contract would specify that the option must be exercised in writing, with a written notice sent to the seller at least 30 days before the desired purchase date. The contract would also outline whether the notice can be sent by email, registered mail, or other communication methods.
In another example, a lease agreement might include an option for the tenant to extend the lease term. The manner of exercise could specify that the tenant must provide notice to the landlord 60 days before the lease expiration date and that the notice must be sent via certified mail to the address provided in the lease agreement.
An example of a manner of exercise clause
Here’s how a manner of exercise clause might look in a contract:
“The Tenant may exercise the option to renew the Lease for an additional term by delivering written notice to the Landlord at least 60 days prior to the expiration of the current lease term. The notice must be sent by certified mail to the Landlord’s address as specified in Section 2 of this Agreement.”
Conclusion
The manner of exercise clause is essential for ensuring that parties understand how to properly exercise their rights, obligations, or options within a contract. By specifying the procedures, timelines, and required forms of communication, this clause helps avoid misunderstandings and ensures that actions are taken according to the terms of the agreement. This leads to smoother contract execution and reduces the risk of disputes.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.