The creature that eats its own brain

29 May 25

The sea squirt is an animal that begins life with a brain and a tail. Immediately after it is born, it uses its brain and tail to propel itself through the water until it finds some rock to attach itself. Once it attaches itself to that rock it consumes its brain, absorbs its tail, and thereafter never moves again; it lives out its remaining life as a brainless water filter.

Many of the standard terms of M&A agreements also began their existence with a brain—the brain of a smart lawyer who perceived an issue that needed to be addressed and drafted a clause to address it.  And then other smart lawyers recognized the value of that newly drafted clause, and adapted and improved it until it became a standard part of most M&A agreements. But once that clause became attached to the "market" it became divorced from the brain or brains that created it, and soon everyone was using it regardless of whether they truly understood all the reasons that prompted its drafting. Even worse, market attachment is so strong that even after a standard clause has been repeatedly interpreted by courts to have a meaning that differs from the meaning ascribed to that clause by those who purport to know but do not actual know its meaning (mindlessly using the now brainless clause), it continues to be used without modification.

Glenn D. West, Avoiding the Mindless Use of the Brainless MAC Clause, WEIL’S GLOB. PRIV. EQUITY WATCH (Aug. 7, 2017).