Sole Discretion: Meaning, Sentence, and Clause

Sole Discretion

This article will explore various aspects of sole discretion, including its legal definition, usage in contracts, enforceability of sole discretion clauses, boundaries of sole discretion rights, implied covenants of good faith, distinctions between sole discretion and reasonable discretion, and usage in sentences. Continue reading

Definition of Sole Discretion:

In contracts and legal writing, the terms “sole discretion” or “at its sole discretion” are frequently used to describe situations in which an individual or organization is granted the authority to decide or act in a particular way after making an assessment and determination.

TransLegal provides the following definition of sole discretion:

With sole discretion, you have complete control over your response or actions in a specific situation.

Synonym for Sole Discretion

If you’re searching for a synonym for “sole discretion” or similar words, there are several options available.:

  • At its choosing
  • In sole judgment
  • In its sole judgment
  • In its sole judgment
  • At its only choice
  • In its exclusive choice In its exclusive judgment
  • At the discretion of

Contractual Sole Discretion

It’s advisable to promptly evaluate the definition of “sole” discretion if you’re involved in contract drafting or have been granted such rights under a contract. Let’s examine this.

Contractual Use of Sole Discretion

In contracts, the terms “sole discretion,” “in its sole discretion,” and “at its sole discretion” refer to how a party may decide on specific aspects of the agreement, exercise an option, or make a decision, as well as the legal ramifications of that decision.

For instance:

  • The “Performance Period” refers to the time frame from the project start date to the project completion date, determined by the service provider at their discretion.
  • The investor can convert the owed payments into company common stock at a fixed price of $10 per share, as per the current agreement.

The company has the right to convert a mandatory payment at a price equal to 98.5% of the company’s lowest daily volume weighted average price within ten trading days.

In a Sentence, Sole Discretion

Sole discretion is acceptable in written language.

There are several ways you can accomplish that.

For instance:

  • The testator retains complete discretion over the contents of the will.
  • The only body with the authority to decide this issue in its entirety is the board of directors.
  • She has complete control over whether to sign a bad contract of adhesion.

Clause of sole discretion

A contractual provision known as the “sole discretion” or “sole and absolute discretion” clause gives a party total discretion over how to interpret certain provisions of the agreement, including the ability to decide how to proceed or exercise certain rights.

For instance:

  • A business may reach an agreement with a factoring company to purchase unpaid accounts receivable.
  • The factoring company will incorporate a sole discretion clause in the contract to ensure it has the right to buy or not buy any receivables from its client.

Enforceability of Sole Discretion Clause

In numerous states, the sole discretion clause is essentially enforceable.

Courts will adhere to parties’ intentions if they have agreed on a party’s “sole” or “absolute” discretion over specific choices or contract aspects.

For instance:

  • Many businesses sign a master services agreement for long-term consulting or professional services with a supplier or subcontractor.
  • Being able to “sit on the bench” for potential client needs is the goal of the contract.
  • The client will typically add a sole discretion clause stating that it is “solely” up to the client to give the subcontractor work or projects from time to time since this master agreement will be in effect for many years and serve as the foundation for numerous “child agreements.”

Limits of the right to “sole discretion”

Courts uphold parties’ intentions when granting “sole discretion” or “absolute discretion” in negotiations, provided it doesn’t make the contract illusory, and no party can use it arbitrarily.

FAQs:

What Does It Decide All by Itself?

Contracts often use “sole discretion” and “in its sole discretion” to describe situations where an individual or organization has the authority to make a decision based on their independent analysis and judgment.

A Discretionary Trust Belongs to Who?

For the benefit of another person or group of people, one person may lawfully own an asset through a discretionary trust. An asset’s legal owner is known as a trustee, and the person or people who hold it for their benefit are known as beneficiaries.

How Do You Take Money Out of a Trust?

Trustees can utilize their bank account for various financial transactions such as writing checks, withdrawing cash, or completing wire transfers to fulfill their responsibilities. It is crucial to remember that trustees oversee the handling of all withdrawals from a trust account.

What is a Trust’s Primary Drawback?

Trusts face perceived irrevocability, loss of control over assets, and expense. Revocability can reduce stamp duty, estate duty, tax, and asset protection.

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