Did you know that prior to the 19th century lawyers used to be paid by the word? The more wordy the contract the more money the lawyer earned. That explains a lot regarding why today “wordy” contracts still exist. Contracts are shared and re-used over and over again. Lawyers rarely draft contracts from scratch. The lawyer will start with a form from a prior transaction, then cuts and pastes language from other sources, adds, deletes, and revises until the form fits the current situation. However, the downside is that certain terms that contain the old wordiness or “Legalese” survive in today’s contracts.
Most contracts contain convoluted language handed down from one transaction to the next through untold generations of lawyers. Today we have some courts that are penalizing attorneys whose briefs are too long and verbose! Wordy contracts can be a minefield for ambiguity and incomprehensible provisions. Litigation is time consuming and expensive, and the client’s business relationships may be irretrievably damaged if litigation is necessary to resolve a dispute over the meaning of ambiguous terms.
What makes it a contract? A contract is a voluntary promise or group of promises that the law will enforce. Success in drafting the terms is whether the intended audience is able to understand the contract. The first step to improving readability is to eliminate words and phrases used only by lawyers. Attorneys have been required to draft contracts using Plain English and choose simple words instead of more difficult ones. Some lawyers still do not embrace the goal of drafting contracts in Plain English. “Drafting in Plain English is not easy; it require[s] discipline and effort. Drafting language that is clear, concise, and understandable to the contract’s audience is a much more difficult endeavor and therefore a higher accomplishment than perpetuating the convoluted language replete in transactional practice today.” Espenschied, L.E. (2015). Contract Drafting – Powerful Prose in Transactional Practice. Chicago, IL: American Bar Association. Moreover, the use of Legalese often compels parties to enter into contracts without a complete understanding of the terms.
As a savvy businessperson, you probably already know better than to sign any contract before your lawyer reviews it, right? Contracts are prevalent in all types of businesses, but small businesses rarely have an attorney review a contract before signing it. An attorney can pinpoint typical problem clauses in contracts that may save you money down the road. Small businesses may take action too quickly under an executed contract like withholding payment. However, the contract may not allow termination of the agreement without giving the other party a chance to cure the breach. Also, if a business uses independent contractors then an attorney can draft an agreement that is favorable to the business. Discussing these actions and issues with your attorney early will ensure that you are not exposing your business to greater risk.
Good legal drafting is both an art and a science, but there are certain principles that lead to greater clarity when writing in Plain English. A well-written contract should:
- Define its terms
- Eliminate ambiguities
- Minimize “Legalese”
- Plan for “what if” contingencies
- Use short sentences
- Avoid passive voice
- Address all issues
- Avoid repetition
- Be consistent in form and substance
- Use simple sentence structure
Plain English cannot completely eliminate the risk of misinterpretations, but it will significantly reduce the risk. Find an attorney that takes the effort to draft using Plain English to limit your liability down the road.