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The problem with contract drafting and what young lawyers can do about it

Written by: The Lawyer
Published on: 8 Mar 2016

    Contract Drafting article image

    You’re an English transactional lawyer at the outset of your career? Then I have a suggestion for you — even though I’m an American lawyer.

    If you’re anything like me at the same stage, you assume that you’re involved in a rational process. You aim to apply whatever you’ve learned to the deals you work on, while being as efficient and effective as possible. You expect that lawyers you work with, and the profession as a whole, will give you advice, and tools, to help you on your way.

    But when it comes to working with business contracts, things aren’t that simple. Traditional contract prose is dysfunctional. And English courts are prone to exacerbating that dysfunction by endorsing spurious distinctions in terminology. As a result, the process of drafting, reviewing, and negotiating contracts takes longer and costs more than it should, and companies are exposed to unnecessary risk of disputes caused by confusing contract language.

    Regarding dysfunctional contract prose, the defining characteristic of the contract process is that as a general matter, no one drafts contracts from scratch. Usually a given transaction will closely resemble others that have gone before, so the urge is to copy contracts used in those other transactions, making only changes required to reflect the new transaction.

    As a result, lawyers take on faith what’s in precedent contracts. And due to heedless copying-and-pasting over generations, that faith isn’t justified: the world over, most English-language business contracts use prose that is archaic, wordy, and confusing. I’ve written about this extensively, in my book A Manual of Style for Contract Drafting, in articles, and on my blog.

    Some parts of the world do better than others. Generally, compared with drafters in the United States, English drafters are somewhat less prone to clogging contracts with endless verbiage and employing inane archaisms such as witnesseth, which you still see used in US contracts to introduce a set of recitals.

    Ken AdamsBut that leaves plenty of room for improvement. For example, use of verb structures to express what I call “the categories of contract language” — language of obligation, discretion, prohibition, policy, and so on—is generally as chaotic in English contracts as it is in contracts drafted in the United States and elsewhere.

    So English contracts are broadly comparable with English-language contracts drafted in other jurisdictions. But what is distinctive is the peculiar approach to contract interpretation displayed by English courts.

    A key function of lawyers is finding order in chaos. Unfortunately, when they’re called on to consider confusing contract language, English courts are prone to finding order where none exists.

    Consider English case law — all of it recent — on phrases using the word endeavours (a fusty alternative to efforts, the word used in other jurisdictions). English courts have endorsed the notion that best endeavours and all reasonable endeavours are each more exacting than reasonable endeavours. As a matter of semantics and contract law, those distinctions are indefensible. Go here for my article about that.

    Consider also English case law on the verbs represents and warrants used to introduce statements of fact. Two recent court opinions have held that the one or more verbs you use can affect remedies. That’s a notion that makes no sense. Go here for my article about that.

    In my experience, in both England and the United States most of those who work with contracts think meaningful distinctions exist between endeavours (and efforts) standards and between represents and warrants. But unlike English courts, US courts have uniformly declined to acknowledge any such distinctions. That makes things easier for those of us in the United States who are looking to draft clearly instead of just following the conventional wisdom — we don’t have to convince people that the courts are wrong too.

    The corrosive influence of this English case law can be seen in how English law firms blithely endorse for purposes of contract drafting the unfounded distinctions created by English courts.

    Given this state of play, I recommend that you break the cycle of credulous copying of precedent contracts and unquestioning acceptance of the conventional wisdom. Instead, become an informed consumer of contract language. Start by gaining a reasoned grasp of the building blocks of contract language.

    But making use of that knowledge would require a shift in attitude. Your priority should be expressing the deal clearly, not simply parroting what’s in other contracts. Don’t be afraid to break rank — the only people you have to convince for purposes of a given contract are those on your side of the deal and the other side of the table, not the transactional world as a whole. Contract usages aren’t subject to a popular vote.

    In other words, be an active drafter, not a passive drafter. Your client will benefit, and so will you. Working with contracts is more gratifying when you’re in control instead of being in thrall to the conventional wisdom.

    But effecting change in a precedent-driven field within a conservative profession requires patience and dexterity.

    In particular, as a junior lawyer, you have to make sure that your appetite for change doesn’t alarm the more senior lawyers you work with. If they’re busy and if you prove yourself to be diligent and reliable, they might well be increasingly willing to leave to you the business of how to say in a contract whatever needs to be said. When in doubt, check.

    Ken Adams is a lawyer based in New York. He’s author of A Manual of Style for Contract Drafting. On 7 November 2016 he will be giving a public ‘Drafting Clearer Contracts’ seminar in London with University College London Faculty of Laws.