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October 12, 2018

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3 Reasons to Use Plain English Contracts

January 26, 2018

 

Confession time: I am a pedant.  A stickler.  Possibly an obsessive.  I once got so fed up with a colleague getting this wrong in his drafting that I wrote a detailed note on when to use “affect” and “effect”.  I’m not proud of that one.

 

When you go through your training as a lawyer, you’re constantly fed a diet of the “right” way to draft contracts.  Woe betide you if you fail to put a defined term in title case, get your “notwithstanding”s mixed up with your “subject to”s, or otherwise fail to follow long-established drafting conventions.

 

Because of my picky nature, as I rose through the ranks of lawyerdom I perpetuated this – junior colleagues would rejoice if a piece of work they’d submitted to me for review came away unblemished with red ink.

 

I was wrong.

 

The problem is, the language and style of contracts has built up over time, reinforced by each new generation of lawyers, in such a way that much of what ends up in a contract is just included because it’s The Done Thing – and not because it has been carefully considered and definitely needs to be there, in exactly those words.  Lawyers tend to assume that a particular set of words is commonly used for a reason, and it takes uncommon courage to depart from what everyone else is doing.

 

In theory that might not be an issue, but I’ve come to firmly believe that the resulting impenetrability of most contracts leads directly to a significant waste of time and money, and makes contracts less effective at a practical level.

 

Turning that on its head, doing things differently can save time and money, and make contracts a genuinely useful tool instead of a seemingly irrelevant pain.

 

 

problem #1

 

One issue is that so much of what is commonly included in contracts simply doesn’t need to be there.

 

As one small example, that clause you often see at the start of contracts which says something like: “Unless the context otherwise requires, words in the singular shall include the plural and in the plural shall include the singular”?  Not needed.  It’s already covered by section 61 of the Law of Property Act 1925.

 

Or take another common form of words – “such consent not to be unreasonably withheld or delayed”.  What does the “or delayed” really add here?  Under what circumstances would someone who is unreasonably taking too long to give consent not also be unreasonably withholding it?  (Yes, I get that “delay” suggests something temporary and “withhold” could be seen as more permanent, but for the period of any delay in giving consent, it is also withheld – any attempt to argue otherwise simply stretches natural meaning too far.)

 

I could go on.  Suffice to say that there is a strong case for stripping out a lot of what lawyers tend to include in contracts as a matter of course.  That, however, is the subject of a future article; this article is about a different problem.

 

problem #2

 

Perhaps the bigger issue is that most contracts unnecessarily use more complicated and specialist language than is really necessary.

 

Sometimes this takes the form of the sort of archaic, flowery language that has become known as “legalese”, like in the following example from a non-disclosure agreement:

 

 

There is a gradual shift away from this type of drafting, but, in my experience, leases and other property documents still seem to be especially prone to this, as do a lot of contracts coming out of the US.

 

At other times the issue of complicated language shows up as hard-to-read sentence construction (most often unnecessarily long sentences).  See the following (fairly gentle) example, also from a (UK Government standard) non-disclosure agreement:

 

"The Recipient undertakes to keep the Confidential Information disclosed by the other party secure and not to disclose it to any third party except to its employees and professional advisers who need to know the same for the Purpose, who know they owe a duty of confidence to the other party and who are bound by obligations equivalent to those in clause 3 above and this clause 4."

 

the impact

 

There are two main consequences of contract language being too difficult:

 

1. It makes it very hard for the people who have to actually make the contract live and breathe to know what is expected of them.

 

2. It makes it far more likely that everyone involved needs to use lawyers, or else risk being caught out.

 

The first consequence above makes it more likely that the contract will not deliver what is intended, that disputes will happen, and even that the contract will ultimately fail.

 

The second consequence above makes it more likely that more time, effort and money will be spent trying to reach agreement (or, if things go wrong, trying to resolve disputes).

 

Don’t get me wrong – lawyers can be brilliant and can save you a lot more money than they cost, and sometimes your contracts are so specialist in terms of subject matter or structure that getting proper legal advice is a must.  But the fact remains that too often the only reason lawyers are involved is that they are the only ones who understand the language being used – and the language doesn’t have to be like that.

 

the solution

 

Contracts can and should use plainer language.

 

Perhaps ironically, this takes a skilled and imaginative legal professional – knowing how to translate a piece of legalese into plain English takes someone who speaks both of those languages, and having the confidence to know what can safely be left out demands both practical experience and technical knowledge.

 

Any investment in moving over to plain English contracts quickly pays for itself, though.  When contracts do use plainer language:

 

  • The people reviewing and negotiating them are less likely to need to involve the lawyers, because they understand the language – so agreement is often reached more quickly, more cheaply, and with positive working relationships intact or even reinforced

 

  • The people actually implementing them are more likely to know what they must and mustn’t do – so delivery is often smoother and more successful, with fewer disputes

 

  • Even if disputes do arise, it is easier to resolve them without having to involve lawyers, meaning there is more chance of them being resolved relatively amicably and, again, saving time and money

 

To me, this is common sense, but there is also some objective evidence out there to back me up – thanks to my friend and former colleague Joe Wilcox of SC Innovation for pointing me towards this Harvard Business Review article, for those who don’t want to just take my word for the above.

 

There are also other, less quantifiable (but no less important) benefits of plain English contracts.

 

Organisations which use them tend to be seen as easier to do business with (because they are!), as well as innovative and trustworthy. 

 

Customers who use plain English contracts make it easier for SMEs to break into their supply chains, which in turn increases choice and competition.  (Are you listening, UK public sector?)

 

Being freed from the constraints of rigid drafting allows greater scope for contracts to be properly aligned with your brand (rather than just having your logo slapped on a load of legalese which doesn’t reflect your company’s character at all).

 

People doing business internationally are less likely to encounter linguistic misunderstandings due to mistranslations of legal jargon.

 

You get the picture.

 

go for it

 

So moving to plain English contracts can:

 

1. Save you time and money

 

2. Make your contracts more likely to deliver what you want

 

3. Enhance your relationships and make you stand out for the right reasons

 

Why wouldn’t you do it?

 

To help make it even easier, Candid Commercial is, at the time of writing, developing a suite of plain English standard contracts which will cover most organisations’ everyday commercial needs.  These will be available for unlimited use under a very affordable annual subscription.  If you want to be told when this service is launching, please drop us a line here – we will only use your contact details for this purpose.

 

Whether or not you choose to use Candid to help you make the move to plain English contracting, I urge you to make that move – you have so much to gain.

 

In any case, I hope this article has affected you positively – together we can effect a similarly positive shift in how people do business...

 

© 2018 Candid Commercial Limited

 

Any typographical or grammatical errors are entirely intentional and there for your amusement.  Honest.

 

 

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Candid Commercial Limited is properly insured and complies with a robust conflicts of interest policy, but does not carry out any reserved legal activities so is not subject to regulation by the Solicitors Regulation Authority; its representatives do not act as solicitors.

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