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The “as defined in” Error

This contract drafting error was found in 31.6% of EDGAR documents analyzed by CrossCheck 365. It stems from (i) a reference to a defined term “as defined in” a particular section or (ii) an entry in an index of defined terms. Either the section mentioned (a) doesn’t exist, (b) doesn’t contain the definition mentioned (although the term is defined in a different section), or (c) doesn’t contain the definition and the term isn’t defined anywhere in the document.

An example from Musk / Twitter Merger Agreement filed with the SEC on April 25, 2022 (these examples are all from indexes of terms):

“Company Common Stock” shall have the meaning set forth in Section 3.1(a).

The term “Company Common Stock” is actually defined in Section 3.1(b).

Another example, also from Musk / Twitter Merger Agreement:

From the Index of Defined Terms:
DTC Article I (indicating that “DTC” is defined in Article I)
and from Article I:
“DTC” shall have the meaning set forth in Section 3.2(b)(ii).

In a sense, “DTC” is defined in Article I, although the “definition” just redirects the reader to 3.2(b)(ii). However, 3.2(b)(ii) does not exist in the document, and furthermore DTC is not defined anywhere in the document. If DTC were never mentioned again, you could argue that the missing definition is harmless, but DTC is mentioned in Section 6.10(a)(ii)(A).

Finally, from an Agreement of Purchase and Sale between Hines Global REIT 550 Terry Francois LP and MB 550 TFB, Inc. dated January 18, 2019:

“Arbiter” has the meaning ascribed to such term in Section 10.9(d).

“Arbiter” is actually defined in Section 9.9(d). Also, there is no Section 10.9(d). This document contains dozens of similar errors, suggesting that an article was deleted from the middle of the text, causing the renumbering of all subsequent articles and sections. But the cross-references were never updated.


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