Developing an international template for contracts: how realistic?

This posting is prompted by a discussion that IP Draughts is having with Ken Adams, the US-based author of a Manual of Style for Contract Drafting (second edition, American Bar Association, 2008).  We are discussing whether it is realistic to develop a style guide for international contract templates.

Contract templates, forms or precedents – whatever you want to call them – are made up of a number of elements.  The most important element is the substantive content.  The template will typically set out some provisions that provide a good starting point for the type of transaction under consideration.  Usually, these provision will need to be adapted to meet the requirements of the individual transaction.

Closely linked to the obligations themselves is the way in which they are expressed.  A style guide such as Ken’s can be very useful in helping the contract drafter to state the obligations clearly and accurately.

The next layer of the onion is the general look and feel, or format, of the contractual document.  There are some legal constraints in this area, eg the requirement under English law for a deed to state that it is being executed as a deed, or the requirement under the European Patent Convention for patent assignments to be executed by both parties – assignor and assignee.  Mostly, though, the format is a mixture of logic and sentiment.  Logic, in the sense that, in well-drafted contracts, the format will be helpful in finding the information that the reader requires, eg in the order of clauses, the use of headings and numbering, and so on.  Sentiment, in the sense that people like to follow a familiar pattern.

A classic example of the sentimental approach is the use of Articles and Sections in US contracts, often with the Article numbers written in Roman numerals and the Section numbers in Arabic numerals.  By contrast, the UK approach is to have a single category – Clauses – using Arabic numerals throughout.  A possible analogy is that the UK approach on this issue is like the design of Danish furniture, while the US approach is more ornate, Rococo perhaps.

The final layer of the onion is best practice on how the template is used, ie the process for negotiating and executing the contract.  This subject includes such diverse areas as use of redlining, getting Board approvals, and whether faxed signatures are acceptable.

Existing publications consider the principles that should be followed when drafting contractual wording.  Some of our publications touch on this subject, although not in anything like the depth of Ken Adams’ book.  Eg see our entry-level book, Drafting and Negotiating Commercial Contracts.

Where there may be a gap is in the look and feel of template agreements.  IP Draughts thinks there is some merit in developing an international template for contracts, which should be based on making them logical, clear, simple, and helpful to the reader, without unnecessary embellishments.  IP Draughts is under no illusions that this template would immediately be adopted as an international standard by law firms.

Any such template could also include illustrative contract wording showing the application of contract drafting principles.

Do readers think there is any mileage in this idea?  Is it worth the effort to work on developing an international template for contract formats?  If so, should a committee be formed to work it up, with members of the committee comprising contract drafting specialists from several jurisdictions, eg US, UK, some civil code countries and Japan?  Perhaps it has been done already by a standards body, but no-one in the contract drafting world knows about it?  Or is this idea pie in the sky?

5 Comments

Filed under Contract drafting

5 responses to “Developing an international template for contracts: how realistic?

  1. Pingback: Koncision » A Ken Adams, Mark Anderson Smackdown: Using “Article” for a Group of Sections

  2. ct

    Having seen the law department of a multinational corporation fail to achieve consensus on a single NDA template for North America (they settled on four templates!) — not to mention other NDA templates for jurisdictions outside North America — I’m not optimistic about international templates.

    That said, given the rate at which routine contracts such as NDAs are being outsourced to lawyers in low-cost countries (e.g. India), it may be that those lawyers are the first to succeed in a truly international template.

    • Interesting thought about outsourcing to India. I can see a danger there that we end up with a mish-mash of international styles, based on commonly-used “traditional” templates.

  3. Ken, I have looked at your sample confidentiality agreement. Your numbering scheme – 1(a)(1) seems uncontroversial. It is a variant on the 1(a)(i)(1) scheme used traditionally in English contracts, although 1.1.1 etc is now seen more often.
    Of course, the format or design of the contract is much more than just the numbering. The use of tab spacing in your sample contract is familiar from East Coast USA contracts, but alien to English contracts. To me, it looks like a layout created in the days of manual typewriters, when the available layout choices were extremely limited. I particularly dislike the fact that (b) is heavily tabbed but then the next layer down – (1) – is untabbed. That looks counterintuitive to me.

  4. Mark: I’d be happy to see what format your group of boffins comes up with. Until then, I’m at peace with the enumeration scheme recommended in A Manual of Style for Contract Drafting. That scheme is on display at http://www.koncision.com/demo/sample-contract/.

    Perhaps a greater challenge would be to come up with a style guide that addresses how to say clearly and efficiently whatever you want to say, whatever the governing law. I’ll be doing my best—um, excuse me, using all commercially reasonable good faith endeavours—to get the third edition of MSCD closer to that goal.

    Some usages that you attribute to sentiment I see as relating to efficiency. I hope that through our blogging we’ll have the opportunity to explore them down the road.

    Ken

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s