It takes years of study and practice to write properly florid legal text. While celebrity lawyers like Stanley Fish have taken ill-advisedly to the presses to entreaty us to write all our prose the same way, no-one actually enjoys reading legal text: not even the curmudgeon who has taken such pleasure in writing it. Construing a contract should not be a boldily pleasure but an act of ascetic sufferance the reward for which comes in the hereafter. Legal counsel does this so the client doesn't have to.
So here is a rare peak inside the fevered mind of a deal lawyer. Take a simple sentence conveying a simple proposition. The less content the better. For example:
Unless we hear from you before the end of the week, we’ll assume you are happy with the termsheet.
Now imagine you are the deal lawyer. Your client asks you to “just have a quick look at this statement to make sure this is ok”. Here is your chance.
The first job is to depersonalise. Law is a formal, not colloquial. It is business. We should not countenance a familiar “we” and “you”: this is a commercial contract not a family reunion, or an outreach centre. Parties should address each other as if they were unacquainted third persons.
Unless the vendor hears from the purchaser before the end of the week, the purchaser will assume the vendor is happy with the termsheet.
But why have easy-to-follow active tenses, when we can depersonalise things further, and elongate with denser constructions? The passive tense is your friend. (If you are a commercial lawyer, you have to take friends wherever you can find them).
Unless the vendor is advised by the purchaser before the end of the week, the vendor will be assumed by the purchaser to be happy with the termsheet.
This all still seems a little loosey goosey. Commercial lawyers have no truck with loose geese. It is time to start layering on detail. This is a painstaking job, and should be done in stages. First, be infinitely clear about the times, dates, deadlines.
Unless the vendor is advised by the purchaser on or before the close of business in London on Friday 22 March 2013, the vendor will be assumed by the purchaser to be happy with the termsheet.
I said infinitely clear. So don’t forget contingencies! What, for example, if 22 March is a public holiday?
Unless the vendor is advised by the purchaser on or before the close of business in London on Friday 22 March 2013 (or, if such date is not a business day in London, the close of business on the immediately following day that is a business day in London), the vendor will be assumed by the purchaser to be happy with the termsheet.
Infinitely clear, I said: We have not yet provided what should happen if the immediately following business day falls in the following calendar month. Perhaps there might be some adverse tax consesquences. You might have to book revenue in a different quarter. Who knows? Better be safe than sorry. After all, as deal counsel you can’t rule out a week and a half of public holidays being spontaneously declared (a Royal Wedding for example), or war suddenly breaking out. And you can be sure, if war should break out between now and the end of the week, the very first thing your client will do is sue your ass for forgetting to think about it. Sure as eggs. So be careful.
Unless the vendor is advised by the purchaser on or before the close of business in London on Friday 22 March 2013 (or, if such date is not a business day in London, the close of business on the immediately following day that is a business day in London, provided that if such immediately following Business Day would not fall in the calendar month of March, such date will be deemed to be the business day in London immediately prior to Friday 22 March), the vendor will be assumed by the purchaser to be happy with the termsheet.
As we inspect the detail, note that some of this original language is a bit sloppy. What is meant by “happy”, exactly? And what if our napkin contradicts the legal contracts we’re going to draw up?
Unless the vendor is advised by the purchaser on or before the close of business in London on Friday 22 March 2013 (or, if such date is not a business day in London, the close of business on the immediately following day that is a business day in London, provided that if such immediately following Business Day would not fall in the calendar month of March, such date will be deemed to be the business day in London immediately prior to Friday 22 March), the vendor will be assumed by the purchaser to have consented to the material economic terms of the transaction, as set out in the term sheet which is attached to this letter as an annex, such consent always to be subject to the legally binding terms of the transaction as shall be agreed between the parties on or before the closing date.
It still isn’t clear who we’re talking about. Just in case anyone is in any doubt, can we say? With infinite certainty?
Unless Joe Bloggs (such person, together with its successors and assigns, the “Vendor”, which expression will, unless the context requires otherwise, include reference to such person’s directors and employees (“Personnel”) but will exclude reference to consolidated and non-consolidated affiliates of such person, howsoever described (“Affiliates”)) is advised by John Doe (such person, together with its successors and assigns, the “Purchaser”, which expression will, unless the context requires otherwise, include reference to such person’s Personnel but will exclude reference to such person’s Affiliates) on or before the close of business in London on Friday 22 March 2013 (or, if such date is not a business day in London, the close of business on the immediately following day that is a business day in London, provided that if such immediately following Business Day would not fall in the calendar month of March, such date will be deemed to be the business day in London immediately prior to Friday 22 March), the Vendor will be assumed by the Purchaser to have consented to the material economic terms of the transaction, as set out in the term sheet which is attached to this letter as an annex, such consent always to be subject to the legally binding terms of the final transaction documents as shall be agreed between the parties on or before the closing date.
But hold on: what if my client agrees to change the deal in the mean time? Or events overtake us?
Subject to any subsequent mutually agreed amendment to the terms hereof between the parties, such amendments if made orally to be subsequently confirmed by the parties in writing within a reasonable period of time (provided that any failure to confirm such oral amendment shall not operate to vitiate such amendment) or any other written agreement between the parties, whether or not expressed as an amendment hereto, which is intended to modify the terms of this agreement, unless Joe Bloggs (such person, together with its successors and assigns, the “Vendor”, which expression will, unless the context requires otherwise, include reference to such person’s directors and employees (“Personnel”) but will exclude reference to consolidated and non-consolidated affiliates of such person, howsoever described (“Affiliates”)) is advised by John Doe (such person, together with its successors and assigns, the “Purchaser”, which expression will, unless the context requires otherwise, include reference to such person’s Personnel but will exclude reference to such person’s Affiliates) on or before the close of business in London on Friday 22 March 2013 (or, if such date is not a business day in London, the close of business on the immediately following day that is a business day in London, provided that if such immediately following Business Day would not fall in the calendar month of March, such date will be deemed to be the business day in London immediately prior to Friday 22 March), the Vendor will be assumed by the Purchaser to have consented to the material economic terms of the transaction, as set out in the term sheet which is attached to this letter as an annex, such consent always to be subject to the legally binding terms of the final transaction documents as shall be agreed between the parties on or before the closing date.
The problem is, now, that this is starting to look like a pretty onerous sort of obligation, so we need to be extra careful to protect your client’s interest. How do you know that your won’t be held to a technical provision with malicious intent?
Subject to any subsequent mutually agreed amendment to the terms hereof between the parties, such amendments if made orally to be subsequently confirmed by the parties in writing within a reasonable period of time (the reasonableness of such period as determined by the parties acting in good faith and in a commercially reasonable manner and provided that any reasonable failure to confirm such oral amendment shall not operate to vitiate such amendment) or any other written agreement between the parties, whether or not expressed as an amendment hereto, which is intended to modify the terms of this agreement, unless Joe Bloggs (such person, together with its successors and assigns, the “Vendor”, which expression will, unless the context requires otherwise, include reference to such person’s directors and employees (“Personnel”) but will exclude reference to consolidated and non-consolidated affiliates of such person, howsoever described (“Affiliates”)) is advised by John Doe (such person, together with its successors and assigns, the “Purchaser”, which expression will, unless the context requires otherwise, include reference to such person’s Personnel but will exclude reference to such person’s Affiliates) on or before the close of business in London on Friday 22 March 2013 (or, if such date is not a business day in London, the close of business on the immediately following day that is a business day in London, provided that if such immediately following Business Day would not fall in the calendar month of March, such date will be deemed to be the business day in London immediately prior to Friday 22 March), such Purchaser acting in good faith and in a commercially reasonable manner, the Vendor will be assumed by the Purchaser to have consented to the material economic terms of the transaction, as set out in the term sheet which is attached to this letter as an annex, such consent always to be subject to the legally binding terms of the final transaction documents as shall be agreed between the parties on or before the closing date.
Good faith. I like that. But wait a minute: if in acting in good faith that doesn't mean my client is somehow responsible to to its counterpart as some sort of fiduciary does it? Best be sure by using the great smart bomb in the lawyer’s armoury. For The Avoidance Of Doubt. No five words in the legal lexicon are more apt to create doubt where none before existed.
Subject to any subsequent mutually agreed amendment to the terms hereof between the parties, such amendments if made orally to be subsequently confirmed by the parties in writing within a reasonable period of time (the reasonableness of such period as determined by the parties acting in good faith and in a commercially reasonable manner provided that any reasonable failure to confirm such oral amendment shall not operate to vitiate such amendment) or any other written agreement between the parties, whether or not expressed as an amendment hereto, which is intended to modify the terms of this agreement, Unless Joe Bloggs (such person, together with its successors and assigns, the “Vendor”, which expression will, unless the context requires otherwise, include reference to such person’s directors and employees (“Personnel”) but will exclude reference to consolidated and non-consolidated affiliates of such person, howsoever described (“Affiliates”)) is advised by John Doe (such person, together with its successors and assigns, the “Purchaser”, which expression will, unless the context requires otherwise, include reference to such person’s Personnel but will exclude reference to such person’s Affiliates) on or before the close of business in London on Friday 22 March 2013 (or, if such date is not a business day in London, the close of business on the immediately following day that is a business day in London, provided that if such immediately following Business Day would not fall in the calendar month of March, such date will be deemed to be the business day in London immediately prior to Friday 22 March), such Purchaser acting in good faith and in a commercially reasonable manner, the Vendor will be assumed by the Purchaser to have consented to the material economic terms of the transaction, as set out in the term sheet which is attached to this letter as an annex, such consent always to be subject to the legally binding terms of the final transaction documents as shall be agreed between the parties on or before the closing date. For the avoidance of doubt, the parties enter this Agreement as arms’ length contractual counterparties, at what they consider to be market prices, for valuable consideration and without notice of any interests to the contrary and nothing in this Agreement will constitute or be construed as, or be deemed to constitute or be construed as, a joint venture or partnership between the Vendor and the Purchaser. Neither the Purchaser nor the Vendor shall assume or be deemed to assume any fiduciary responsibilities or other analogous obligations of a trust or agency nature, and each parties hereby acknowledges that it has obtained such legal advice as it as considered necessary or appropriate to assess the suitability and/or appropriateness of entering into this transaction and expressly disclaims any reliance on the other, or any responsibility for advising the other, as to any risks, economic, legal, regulatory, reputational or otherwise, which may arise (whether or not such risks to arise) as a result of the contemplation of the transaction contemplated herein.
And so our 19 word napkin scribble has evolved into a 500 word behemoth. And we haven't yet started inserting indemnities, let alone a governing law clause. It requires no particular acumen, but just sheer bloody mindedness, to carry on, as we lawyers like to say, ad infinitum. Ad nauseam, even.
The information revolution has brought our planet to an inflexion point. This is our generation's industrial revolution, and conventional wisdom of all sorts is suddenly in doubt. But is the universe really about to wake up? Are we about to look into the face of God? Ray Kurzweil thinks so.
Julian Jaynes rounds out his wonderful The Origins of Consciousness in the Breakdown of the Bicameral Mind with a sanguine remark that the idea of science is rooted in the same impulse that drives religion: the desire for “the Final Answer, the One Truth, the Single Cause”.
Nowhere is this impulse better illustrated, or the scientific mien so resemblant of a religious one, than in Ray Kurzweil’s hymn to forthcoming technology, The Singularity Is Near. For if ever a man were committed overtly - fervently, even - to such a unitary belief, it is Ray Kurzweil. And the sceptics among our number could hardly have asked for a better example of the pitfalls, or ironies, of such an intellectual fundamentalism: one one hand, this sort of essentialism features prominently in the currently voguish denouncements of the place of religion in contemporary affairs, often being claimed as a knock-out blow to the spiritual disposition. On the other, it is too strikingly similar in its own disposition to be anything of the sort. Ray Kurzweil is every inch the millenarian, only dressed in a lab-coat and not a habit.
Kurzweil believes that the “exponentially accelerating” “advance” of technology has us well on the way to a technological and intellectual utopia/dystopia (this sort of beauty being, though Kurzweil might deny it, decidedly in the eye of the beholder) where computer science will converge on and ultimately transcend biology and, in doing so, will transport human consciousness into something quite literally cosmic. This convergence he terms the “singularity”, a point at which he expects with startling certainty that the universe will “wake up”, and many immutable limitations of our current sorry existence (including, he seems to say, the very laws of physics) will simply fall away.
Some, your correspondent included, might wonder whether, this being the alternative, our present existence is all that sorry in the first place.
But not Raymond Kurzweil. This author seems to be genuinely excited about a prospect which sounds rather desolate, bordering on the apocalyptic, in those aspects where it manages to transcend sounding simply absurd. Which isn’t often. One thing you could not accuse Ray Kurzweil of is a lack of pluck; but there’s a fine line between bravado and foolhardiness which, in his enthusiasm, he may have crossed.
His approach to evolution is a good example. He talks frequently and modishly of the algorithmic nature of evolution, but then makes observations not quite out of the playbook, such as: “the key to an evolutionary algorithm ... is defining the problem. ... in biological evolution the overall problem has always been to survive” and “evolution increases order, which may or may not increase complexity”.
“Kurzweil seems to be
genuinely excited about a prospect which sounds rather desolate,
bordering on the apocalyptic, wherever it manages to
transcend sounding simply absurd. Which isn’t often.”
But to suppose an evolutionary algorithm has “a problem it is trying to solve” - in other words, a design principle - is to emasculate its very power, namely the facility of explaining how a sophisticated phenomenon comes about *without* a design principle. Evolution works because organisms (or genes) have a capacity - not an intent - to replicate themselves. Nor, necessarily, does evolution increase order. It will tend to increase complexity, because the evolutionary algorithm, having no insight, is unable to “perceive” the structural improvements implied in a design simplification. Evolution has no way of rationalising design except by fiat. The adaptation required to replace an overly elaborate design with more effective but simpler one is, to use Richard Dawkins’ expression, an implausible step back down “Mount Improbable”. That’s generally not how evolutionary processes work: over-engineering is legion in nature; economy of design isn’t, really.
This sounds like a picky point, but it gets to the nub of Kurzweil’s outlook, which is to assume that technology evolves like biological organisms do - that a laser printer, for example, is a direct evolutionary descendent of the printing press. This, I think, is to superimpose a convenient narrative over a process that is not directly analogous: a laser printer is no more a descendent of a printing press than a mammal is a descendent of a dinosaur. Successor, perhaps; descendant, no. But the “exponential increase in progress” arguments that Kurzweil repeatedly espouses depend for their validity on this distinction.
The “evolutionary process” from woodblock printing to the Gutenberg press, to lithography, to hot metal typing, to photo-typesetting, to the ink jet printer (thanks, Wikipedia!) involves what Kurzweil would call “paradigm shifts” but which a biologist might call extinctions; each new technology arrives, supplements and (usually) obliterates the existing ones, not just by doing the same job more effectively, but - and this is critical - by opening up new vistas and possibilities altogether that weren’t even conceived of in the earlier technology - sometimes even at the cost of a certain flexibility inherent in the older technology. That is, development is constantly forking off in un-envisaged, unexpected directions. This plays havoc with Kurzweil’s loopy idea of a perfect, upwardly arcing parabola of utopian progress.
It is what I call “perspective chauvinism” to judge former technologies by the standards and parameters set by the prevailing orthodoxy - being that of the new technology. Judged by such an arbitrary standard older technologies will, by degrees, necessarily seem more and more primitive and useless. The fallacious process of judging former technologies by subsequently imposed criteria is, in my view, the source of many of Ray Kurzweil’s inevitably impressive charts of exponential progress. It isn’t that we are progressing ever more quickly onward, but the place whence we have come falls exponentially further away as our technology meanders, like a perpetually deflating balloon, through design space. Our rate of progress doesn’t change; our discarded technologies simply seem more and more irrelevant through time.
“Evolutionary development is
constantly forking off in unexpected directions. This
plays havoc with Kurzweil’s loopy idea of a perfect, upwardly arcing
parabola of utopian progress.”
Kurzweil may argue that the rate of change in technology has increased, and that may be true - but I dare say a similar thing happened at the time of the agricultural revolution and again in the industrial revolution - we got from Stephenson’s rocket to the diesel locomotive within 75 years; in the subsequent 97 years the train’s evolution been somewhat more sedate. Eventually, the “S” curves Kurzweil mentions flatten out. They clearly aren’t exponential, and pretending that an exponential parabola might emerge from a conveniently concatenated series of “S” curves seems credulous to the point of disingenuity. This extrapolation into a single “parabola of best fit” has heavy resonances of the planetary “epicycle”, a famously desperate attempt of Ptolemaic astronomers to fit “misbehaving” data into what Copernicans would ultimately convince the world was a fundamentally broken model.
If this is right, then Kurzweil’s corollary assumption - that there is a technological nirvana to which we’re ever more quickly headed - commits the inverse fallacy of supposing the questions we will ask in the future - when the universe “wakes up”, as he puts it - will be exactly the ones we anticipate now. History would say this is a naïve, parochial, chauvinistic and false assumption.
And that, I think, is the nub of it. One feels somewhat uneasy so disdainfully pooh-poohing a theory put together with such enthusiasm and such an energetic presentation of data (and to be sure, buried in Kurzweil’s breathless prose is plenty of learning about technology which, if even half-way right, is fascinating), but that seems to be it. I suppose I am fortified by the nearby predictions made just seven years ago, seeming not to have come anything like true just yet:
“By the end of this decade [i.e., by 2010] computers will disappear as distinct physical objects, with displays built in our eyeglasses and electronics woven into our clothing”
On the other hand I could find scant reference to “cloud computing” or equivalent phenomena like the Berkeley Open Infrastructure for Network Computing project which spawned schemes like SETI@home in Kurzweil’s book. Now here is a rapidly evolving technological phenotype, for sure: hooking up thousands of serially processing computers into a massive parallel network, giving processing power way beyond any technology currently envisioned. It may be that this adaptation means we simply don’t need to incur the mental challenge of molecular transistors and so on, since there must, at some point, be an absolute limit to miniaturisation, as we approach it the marginal utility of developing the necessary technology will swan dive just as the marginal cost ascends to the heavens; whereas the parallel network involves none of those limitations. You can always hook up yet another computer, and every one will increase performance.
I suppose it’s easy to be smug as I type on my decidedly physical computer, showing no signs of being superseded with VR Goggles just yet and we’re already three years into the new decade (he also missed the mobile computing revolution, come to think of it), but the point is that the evolutionary process is notoriously bad at making predictions (until, that is, the results are in), being path-dependent as it is.
You can’t predict for developments that haven’t yet happened. Kurzweil glosses over this shortfall at his theory’s cost.
A version of this article was first published on Amazon in 2010.
If your kids already spend eight hours a day online, the future depicted in Pareg and Ayesha Khanna's “Hybrid Reality” might ring true for you. Others may be harder to persuade.
Hybrid Reality is the short monograph which I suppose serves as flagship publication Pareg and Ayesha’s Hybrid Reality Institute, an organisation whose raison d’etre seems to be the pursuit of unfettered wishful thinking about the potential of technology. Good luck to them: dreaming up whacky visions of the future does sound like fun, and while it’s hard to see any practical application for the Fortune 500 companies the authors claim as their clients, if they’ve managed to persuade these conglomerates otherwise, happy days. Especially if in the future, everything is going to be crowd-sourced and free.
Hybrid Reality is thus an attempt to sketch out a future based on extrapolating current trends of technological development: a (thankfully slimmer) companion-piece to Ray Kurzweill’s The Singularity Is Near.
In fairness, Hybrid Reality quickly moves beyond stock platitudes about crowdsourcing, but where it does it does so without much credibility. The text is plastered with buzzwords borrowed from other disciplines and deployed with carefree abandon:
“accelerated evolution creates what we might call a Heisenbergian or quantum society: we are particles whose position, momentum and impact on others, and the impact of others on us, are perpetually uncertain due to constant technological disruptions.”
Okayyy. Amongst the rhubarb there is a point to be made about rapidly disrupting technologies, but that’s not it. To the contrary, the rate of change is so fast that genuinely novel technologies and businesses have little chance to establish themselves, and that those which get a foothold do so as by fiat as sober business development, and then proceed to hammer everyone else into the ground. In such a nasty, brutish and short environment conditions favour not elegance and sophistication in design but the lowest common denominator.
Breath-taking technologies of the sort which overflow this book, on the other hand, assume a sophistication which needs a warm and safe environment in which to incubate. Increasingly, new technologies never get the chance to be smart. It isn’t accelerated evolution that’s going on, but accelerated extinction.
“In
such a nasty, brutish and short environment conditions favour not
elegance and sophistication in design but the lowest common
denominator.”
I suppose you might expect a degree of credulity from faculty members of the “Singularity University” but, still, their vision owes as much to science fiction as it does to academic analysis and nothing at all to the traditional discipline of economics. Perhaps the dismal science, too, will succumb to the information revolution: cavalierly, Samuel Huntingdon’s maxim is reformulated so that it is not economics but technology that is “the most important source of power and wellbeing”. Older hands will recall hearing that kind of talk before, and it didn’t work out so well in 2003 when hundreds of “new economy” business models folded when it turned out they did need to generate revenue after all.
It’s easy to be a naysayer, of course, but all the same my hunch is that the Khannas’ monologue has little value for anything but excitable kite flying. Many of their assertions strongly suggest this pair really, literally, need to get out more. “Of the eight hours a day children today spend online, 1.5 involve using avatars…” they say, as if that initial premise may be taken as a given. Eight hours a day online? Which children are these, exactly? “Robots are incontestably becoming more ubiquitous, intelligent and social” and “represent an entirely new type of ‘other’ that we interact with in our social lives”. Elsewhere, “Technik”, as they put it, seems to have the power to change the laws of nature, and in the short term: “The average British citizen will likely live to be 100 years old”, they predict. Technik is so clever it can even grant us powers which we already have: In the future there will be virtual reality goggles, we are told, which can “sense other people’s stress levels”. Just imagine being able to do that.
“Many of their assertions strongly suggest this pair really, literally, need to get out more.”
You can, in any case, read your fill here of all the ways the internet of things will provide an untold wealth of cool free stuff, but note the lack of any financial analysis: All this cool stuff requires effort: not just to design and conceptualise, but to manufacture, distribute, house, power, maintain and (to extent it can’t be fully computerised) operate. And effort, generally, requires money. Previous generations of technological development have shifted the labour demand curve upwards: automation has taken out repetitive, low value tasks but created more complex ones designing, building and maintaining the machinery to carry out these tasks: as a result we have grown busier with each development, not more idle - though our occupations have been more complex, challenging and rewarding. The Khannas’ brave new world would, by implication, flip that on its head.
For argument’s sake, let’s say the robots can fully take over, perform our manual labour, wipe bottoms, cure diseases and revolutionise production across all industries and agricultures so that human intervention is not required at all. Hard to see, but let’s say. Is a permanent state of situation of blissful, but chronic, total global unemployment a feasible basis for an economy?
As far as I know, man cannot live by Facebook likes alone. Last time I checked, rent wasn’t free. Nor was power, food, nor raw materials. As we go on, they’re getting harder (and costlier) to extract. So who will finance these lives of leisure? With what? Why? Who would provide services, when there was no-one to pay for them? Is it perhaps the case that personal labour, rather than being an unfortunate by-product of the “old economy” way of doing things, is in fact an immutable in the calculus of value?
Dreaming about amazing technologies which might be coming down the pike is the job of a science fiction writer. The academic question is less glamorous and more fundamental: how, within the new parameters of digital commons and in a post-growth world, can anyone devise a business model able to deliver them? These, it seems to me, are the really challenging questions, and you won’t find them addressed in this book.
