Drafting contract language to make it readily apparent to unsophisticated parties can be a daunting task. Only a limited number of formatting options is available to a drafter who tries to make two-dimensional text “jump out” at a reader to accentuate the relative importance of the printed matter. Most drafters would agree that to emphasize specific language in a contract, the most effective and widely-used formatting technique is to capitalize it.
The U.S. Court of Appeals for the 9th Circuit has explained, however, that this may not always be the answer. In fact, the court stated in Am. Gen. Fin., Inc. v. Bassett (In re Bassett), 285 F.3d 882 (9th Cir. 2002) that “[l]awyers who think their caps lock keys are instant ‘make conspicuous’ buttons are deluded.” The court examined the reliance on capitalization and other common misconceptions about what makes contractual language “conspicuous.” The issue in Bassett arose when the court scrutinized a reaffirmation agreement to determine whether it complied with the “clear and conspicuous” requirement set forth in 11 U.S.C. Section 524(c)(4).
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