What’s the point of good contract drafting?

imperfectThis post is triggered by several recent conversations and thoughts:

  • the patent attorney who told IP Draughts’ colleague recently about the poor quality of patent examiners in the USA and certain other countries, who apparently sometimes misunderstand basic English, let alone complex scientific concepts. This raised in IP Draughts’ mind the question of why patent attorneys spend years honing their patent drafting skills to a very high technical level, when the system seems to be crude and imperfect; and whether a similar question should be raised about the drafting of contracts.
  • the Court of Appeal judge who told IP Draughts that courts would always try to “do justice in the case” in contract disputes, the implication being that interpretation of the wording used in the contract might take second place to wider policy considerations, and that if IP Draughts wanted an approach based purely on the contractual obligations he should go to arbitration.
  • the fact that contracting parties will sometimes argue an interpretation of contract wording that is clearly wrong, no matter how clear the drafting, if it is in their commercial interests to do so.

There is a legitimate question about whether we are too nice (in the senses of fastidious or foolish) about the drafting of contracts. Rather than waste time focussing on clear and accurate use of language to state contractual obligations, shouldn’t we recognise that the world is imperfect, treat contracts as a process rather than an opportunity for exercising our writing skills, get the wording roughly right, and save our energies (and the client’s money) for arguing the toss when a dispute arises?

yukIP Draughts’ answer to this question is an emphatic no. But mere assertion is not enough. Why should we spend time in getting the wording as right as we can? Several thoughts come to mind:

  1. The example of the construction industry, where parties tend not to take legal advice at the stage of entering into their contracts, and instead spend more money on litigating their contracts. There is a view among (at least some) lawyers that more money spent in getting the contracts right in the first place would save money in litigation and overall.
  2. The fact that sometimes court cases are decided based on the wording of the contract – several examples come to mind  – where clear and accurate wording may reduce the likelihood of the court coming up with an inappropriate interpretation. In recent years, the UK Supreme Court has heard several cases in which it has updated its approach to interpretation – particularly where the wording is unclear. Those cases would probably not have reached the Supreme Court if the wording had been clear.
  3. That producing clear, accurately drafted contracts demonstrates professionalism, which itself can help to smooth contract negotiations.
  4. That clients don’t always know whether their lawyer has the necessary legal knowledge and experience to handle their matter, but they can more often spot poor use of language. The self-interest of lawyers should encourage them to draft well.
  5. That consumer pressure, particularly in the UK but probably in other advanced countries, has made it difficult for lawyers to hide behind obscure, fusty language. IP Draughts had a very interesting conversation with some Chinese law students during a recent training course, in which they queried IP Draughts’ focus on clear, simple language and said that clients in China would expect their lawyer to use complex legal language, and possibly even think less of their lawyer if they used simple language. This didn’t resonate with IP Draughts’ current experience of UK clients, but he could imagine a similar approach a few generations earlier in the UK.
  6. That even if clients sometimes argue extreme interpretations of wording if it suits their commercial purpose, by making the wording clear and accurate, those arguments become more difficult to make.

wandIn summary, clear contract drafting is not a magic wand that guarantees that disputes are avoided and that contracts are interpreted correctly. The benefits are more nuanced. But there should not be any doubt that taking care to draft clearly and accurately is a good use of time and money.

 

 

6 Comments

Filed under Contract drafting, Legal practice

6 responses to “What’s the point of good contract drafting?

  1. I suspect the simplest answer is that of course we must try – given that things are this hard when we are trying to draft clear documents, imagine what it would be like if we didn’t bother…

  2. Your comment about arguing for an interpretation that is clearly wrong certainly resonates. I find a lot of the disputes that arise in long term, complex commercial contracts relate to situations that the parties just didn’t envisage (and wouldn’t have even if they had been given 5 years to negotiate). In these situations contract language tends to get contorted to try and establish intention when, if the parties were honest, they would admit they just didn’t think of the issue – there was no objective or subjective intent. In these circumstances I rather like the idea of the court doing justice. Its a shame though that it costs so much to get it.

    • thanks, Vicky. I vaguely recall there used to be something called a construction summons, to get a ruling on the interpretation of a document, which might have been cheaper than a full blown trial. However, if the task is not just to interpret the wording, but to decide what is the best (most just) way of dealing with an unexpected event in a long term relationship, then I guess it is going to be expensive and involve lots of discovery. Unless we use/adapt IPEC. There is already a mercantile court, but I don’t know how its costs compare with the High Court proper.

  3. thanks, Vance. Righteousness may be pushing it a bit, but otherwise I agree with your comments.

  4. vrkoven

    Hear, hear!

    Point 6 is, of course, the key to why even clearly worded contracts go to court, but anything we can do to minimise the wiggle room (for parties and judges) is a blow for truth, justice and general righteousness.

    On the other hand, sometimes it’s *our* clients who wish to wiggle out of a deal that on “mature reflection” turns out to have been injudicious. I am reminded of the story of a law professor at Harvard, the (then) leading authority on wills and estates, who was retained by a testator to create the “unbreakable” will, and then, after the testator’s death, retained by the disappointed non-legatees to break it (which he did). There must be a similar yarn in the UK, which like mine is probably apocryphal: I find it hard to believe that professional codes would permit the second representation.

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