Judging the quality of contract drafting

itamaeIt is said that Japanese sushi chefs undergo years of training, learning from a master the fine arts of cooking the rice to a house style, preparing the fish and other ingredients, shaping the nigirizushi, conducting oneself in front of the customers, and even making diplomatic mistakes in the calculation of the bill.

Such devotion to detail may be thought excessive for what is regarded, at least in the UK, as a mass-produced snack item that can be found in most supermarkets, its place now well-established in the chiller cabinet next to Cornish pasties and coronation-chicken sandwiches.

Similar thoughts are prompted by the subject of contract drafting. Should we treat contracts as a commodity to be bought from an online supermarket (such as PLC or PSL), or are they a bespoke item whose preparation requires the skills of a dedicated expert?

pizza-baseIn fact, they are often a hybrid. Typically, a drafter will use a template agreement as a starting point for preparing an individual contract. The quality of the end-product will depend on both the suitability and drafting quality of the template, and on the drafter’s ability to adapt the template to the individual transaction.

Sometimes, there is little choice in the starting document, either because it has been prepared by the other side in negotiations, or because the client’s policy is to use one of its standard agreements or a well-known, third-party template such as a Brunswick collaboration agreement. There may be limited client appetite for incurring time in making changes to a source document that are not specific to the deal, or of major importance. The fastidious drafter may need to avert their gaze. What cannot be cured must be endured.

When it comes to the drafting of individual clauses, the drafter’s skills are put to the test. The drafting should be good in itself, but it should also be made consistent, where appropriate, with the content and style of the template that is being used. Careful accuracy is required for both of these tasks.

Where a tailored clause is inserted into a template agreement, the clause will itself often be ‘cut and pasted’ from another template, with or without changes. This can and does result in drafting mistakes and inconsistencies, which the drafter should correct. When IP Draughts is reviewing a draft agreement, he focuses on both the substance and the detailed drafting. It is sometimes possible to gauge how careful the drafter has been from the smallest of details.

sushiFor example, if new definitions have been inserted in the definitions clause of a template agreement, do they follow the same drafting conventions? Do they start “shall mean” when the template uses “means” or, to be really picky, do they start “Means” when the template uses “means”? Does the definition end in a full stop when the template definitions end in a semi-colon? If a semi-colon is used in the template, and the penultimate definition ends with an “and”, has the position of the “and” been moved when a new definition is added to the end of the list of definitions?

There are dozens of points similar to the above, where different templates follow different conventions, but it is appropriate to stick with the approach taken in the source document.

Spotting and correcting these points may not result in any significant improvement in the legal effect or commercial clarity of the document, but they are an indicator of how careful the drafter has been. If she can spot points like this one, she is likely also to spot more significant drafting defects.

After years of practice, the apprentice will become a true itamae, who can spot even the tiniest flaw. Examples of tiny flaws in contracts include:

  • the automated clause numbers that are in a slightly different typeface or font to the text that follows
  • the spacing between clause number and text that changes by a millimetre or two, half-way through the contract

stampSome flaws are so tiny that, even if we spot them, we may not always bother to correct them; for example, the comma that is in italic text when all the others are in normal text.

Readers, do you have pet stylistic peeves that you like to correct in contracts, or those that you regard as too trivial to correct? IP Draughts would like to hear from you.

By the way, and just getting his defence in first, IP Draughts often makes typing mistakes in this blog, which tend to be corrected after the blog has been published, rather than before. Some of his readers are good enough to point these out!

 

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When is a licence not a licence? When it’s a covenant not to sue?

Golden oldie number 3 – this subject prompts much discussion!

IP Draughts

alligatorsDear reader, IP Draughts needs your help with some research.  He has volunteered to give a short talk  on the differences (if any) between an intellectual property licence and a covenant not to sue. The talk will be held at the London offices of Olswang on Tuesday 19 February at 5pm.  Registration details here.  IP Draughts is sure that the readers of this blog will be able to shed light on this puzzling subject.

The expression covenant not to sue is sometimes seen in IP agreements, but when you examine the detailed wording of the clause in which the term appears, it often looks very much like a licence.  The expression seems to originate in US agreements to settle IP litigation, but it has spread to some non-contentious agreements.  Here is an example, taken from Drafting Patent License Agreements (Brunsvold et al, BNA Books, 6th edition at page…

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Exclusively for Everyone: Oxymorons ‘R’ Us

Last week’s golden oldie seemed to be popular, so here is another article from this blog’s archive. This time on exclusive, sole and non-exclusive licences.

IP Draughts

In 2000, the UK department store, Marks & Spencer, unveiled a new strapline, Exclusively for Everyone, that was to feature in their advertisements for nighties for most of the Noughties.  Well, for all their products, really, but IP Draughts is susceptible to a finely-turned alliteration.

Every time he saw this strapline, the pedant in IP Draughts thought: you can’t be exclusively for everyone.  It is a self-contradictory statement.

Another phrase that induces this reaction in IP Draughts is sole and exclusive licence.  You can’t have a sole and exclusive licence.  It can be sole or it can be exclusive.  It can’t be both at the same time.

Usually, when the phrase appears in a licence agreement, the drafter intends to grant (or be granted) an exclusive licence.  IP Draughts has never encountered a drafter who argued to retain sole and exclusive when the potential contradiction was pointed out. …

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Mr Pettifog speaks his mind. Unfortunately.

miseryWhat is your tube, and how do I get on it, asks Mr Pettifog at partners’ tea last week. Misery Line, Hampstead branch, replies Old Unreliable wittily. I generally use the lift, he adds, taking a ginger hobnob from the tray.

A puzzled silence descends on the room. Eventually, Bright Spark speaks. Do you mean YouTube, she asks? Yes, that’s what I said, replies Mr Pettifog.

Was there something in particular you wanted to see?, asks Young Hope. It’s mostly videos of cute cats, he adds.

Oh, I just wanted to see if someone had recorded something, Mr Pettifog replies.

catYoung Hope and Bright Spark quickly look at one another. Bright Spark renews her cross-examination. Was it something you recorded?, she asks. No, I wouldn’t know how to, replies Mr Pettifog smugly. Then something you said, but someone else recorded?, asks Jim Rough-Diamond, joining the cross-examination tag team.

Oh, I don’t know, replies Mr Pettifog, attempting an air of mild boredom. Does anyone want that last cucumber sandwich?, he adds, trying to deflect attention from his earlier question.

While this is going on, Young Hope has opened his iPad and searched on the YouTube site. An Anglo-Saxon expression escapes his lips.  Could this be the recording you were interested in?, he asks, quickly making a remote connection to the tea room’s flat-screen TV.

Everyone in the room turns towards the TV. It shows a panel discussion at a conference. Three middle-aged, white men in business suits are sat at a table. Mr Pettifog is one of them. On the wall behind the table, the logo of World IP Professionals is clearly visible. A voice can be heard, apparently a member of the audience who cannot be seen on the recording. The voice asks: how can you reconcile the government’s decision to go ahead with ratifying the World IP Arbitration Treaty, which is subject to the supervisory jurisdiction of the Court of Justice of the European Union, with the Prime Minister’s statements that the CJEU won’t have any jurisdiction in the UK after Brexit?

Mr Pettifog is the first to reply. Well, he says, we don’t trust a word that this government says, do we? (The audience laughs, and he warms to his theme.) And anyway, they’re too stupid to realise that ratifying the convention leads to CJEU jurisdiction. And so are the tabloid newspapers, and the oiks that write articles for them. (More laughter, some of it nervous.) They won’t be interested in this kind of subject, it’s far too intelligent for them.

The recording ends, and Young Hope switches off his iPad.

Jim Rough-Diamond is the first to speak. Oiks are too stupid to realise?, he asks.

chathamIt was a private meeting, subject to the Chatham House rule, replies Mr Pettifog sulkily. Whoever recorded it was clearly in breach of a legal duty. Can’t it be deleted from your tube?

Young Hope shakes his head. Mr Pettifog turns white, then hastily leaves the room. Partners’ tea resumes.

 

[Note: this is an entirely fictional story, inspired by a real-life incident, but with completely different facts, people, motivations and outcome, and written for humorous purposes only. No, really.]

 

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