Does Contract Prose Matter?

By Ken Adams

Ken Adams here. This is from this post on my blog. It describes why contract prose matters, even though many who work with contracts think it’s not worth fussing over.

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Does contract prose matter? Of course it does. Even if you assume that the parties have notionally agreed on the terms of the deal, how you express those terms in a contract can determine how that transaction fares.

But many people who work with contracts don’t realize that. Some might be contract managers who regard contract prose as a lawyer thing, so they tune it out. Others might be titans of BigLaw who think that coming up with wording is something best left to minions. And still others—the biggest group, I suspect—might be copy-and-paste monkeys who think that contract prose is something you recycle rather than create.

For their benefit, here are the different reasons why contract prose matters.

Telling the Story

A deal consists of disparate elements; it’s the drafter’s job to weave them into a coherent whole. This involves following some basic rules: Don’t put the definition section at the front of the body of the contract. Generally, don’t try to group one party’s obligations in a section or article entitled Acme’s Obligations. And so on.

But the more complex the transaction, the more challenging that task is. You have to break the contract down to its constituent elements, reshape them, and rearrange them. If you do a good job, the reader understands better what’s going on. Reviewing, negotiating, and monitoring performance all happen more smoothly and more quickly.

Avoiding Unpleasant Surprises

Because contract language is limited and stylized, and because a lot is at stake, often things aren’t as they seem: you think the contract says X, but someone argues that in fact it says Y.

This sort of problem arises when you indulge in, for example, the notion that effortsvariants involve different degrees of onerousness, or the notion that it’s helpful to say indemnify and hold harmless. When legalistic hairsplitting is at odds with semantics and logic, things get ugly.

Confusion also lurks in the many forms of ambiguity that can afflict a contract. Ambiguity of the part versus the whole; syntactic ambiguity; ambiguity in reference to time; and so on. See this article for an overview. Being able to spot this kind of ambiguity isn’t a skill that comes naturally. Instead, it requires that you train yourself. (A Manual of Style for Contract Drafting is the best resource for that.) It’s a skill that pays off, because ambiguity routinely causes disputes.

Dispelling the Fog

Even if they don’t directly result in a dispute, the shortcomings of traditional contract prose—bollixed verb structures, redundancy, archaisms, rhetorical emphasis, and so on—create a fog that makes it harder to figure out what’s going on. So everything takes longer. And the fog makes it harder to spot and root out sources of confusion.

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So if you care about not wasting time and money, contract prose matters. If you care about being more competitive, contract prose matters. If you care about reducing the risk of contract disputes, contract prose matters.

The only time contract prose doesn’t matter is when contracts themselves don’t matter. I wrote this LinkedIn article about whether contracts matter. It might be that we’re at risk of contracts not mattering, simply because for some of us the rule of law doesn’t matter.

Ken Adams is president of Adams Contracts Consulting LLC, author of A Manual of Style for Contract Drafting, and an advisor to LegalSifter.