Clear writing is hard to find. Legal contracts are the worst culprits.
I am always disappointed when I find unclear legal writing. The reason is this: we lawyers generally recognize that we are no longer in the business of mystifying. (We once were. That’s why we wear the sacerdotal-ish looking outfits when we go to court.) Now we understand that we are in the business of clarifying. It’s sad when we get that wrong.
I found this in a contract a couple of months ago. It’s a real doozie:
[GENTLE READER: The author will not be responsible for any accidents, personal injury, property damage or death resulting from reading what follows. DO NOT OPERATE HEAVY MACHINERY OR DRIVE AFTER READING THIS.]
Within one hundred twenty (120) days following the Closing Date, Buyer shall, or shall cause the Company to, prepare and deliver to the Representative a statement (the “Closing Statement”) setting forth its final calculation of the Upfront Amount and each of the components thereof and the Closing Statement shall be prepared in accordance with Generally Accepted Accounting Principles (except that no footnote disclosures shall be required) except as otherwise contemplated by the definitions of Net Working Capital, Indebtedness or Cash. During the thirty (30) days immediately following the Representative’s receipt of the Closing Statement the Company shall provide the Representative and its representatives with reasonable access during normal business hours and after reasonable advance notice to the books and records of the Company and its Subsidiaries for purposes of their review of the Closing Statement and the Closing Statement and the resulting calculation of the required adjustments to the Estimated Upfront Amount (if any) shall become final and binding upon the parties hereto thirty (30) days following the Representative’s receipt thereof unless the Representative delivers written notice of its Notice of Disagreement to Buyer prior to such date provided that the Closing Statement and the resulting calculation of the required adjustments to the Estimated Upfront Amount shall become final and binding upon the parties upon the Representative’s delivery prior to the expiration of the thirty (30) day period of written notice to Buyer of its acceptance of the Closing Statement and any Notice of Disagreement shall specify in reasonable detail the nature and amount of any disagreement so asserted and attach documentation supporting the Representative’s calculations and in the event that a Notice of Disagreement is delivered by the Representative within the period required above then the Closing Statement as revised in accordance with this provision and the resulting calculation of the required adjustments to the Estimated Upfront Amount shall become final and binding upon the parties on the earlier of the date any and all matters specified in the Notice of Disagreement are finally resolved in writing by Buyer and the Representative and the date any and all matters specified in the Notice of Disagreement not resolved by Buyer and the Representative are finally resolved in writing by the Arbiter (as defined below), and the Closing Statement shall thereupon be revised to the extent necessary to reflect any resolution agreed to by Buyer and the Representative or any final resolution determined by the Arbiter in accordance with this Section. During the thirty (30) days immediately following the delivery of a Notice of Disagreement or such longer period as Buyer and the Representative may agree in writing Buyer and the Representative shall attempt to resolve in writing any differences which they may have with respect to any matter specified in the Notice of Disagreement, and all such discussions related thereto shall be conducted on a strictly without prejudice basis and at the end of such thirty (30) day period, Buyer and the Representative shall submit any and all matters (but only such matters) which remain in dispute and which were properly included in the Notice of Disagreement to a nationally-recognized independent accounting firm that is mutually selected by Buyer and the Representative (the “Arbiter”) for review and resolution. Buyer and the Representative shall instruct the Arbiter to, and the Arbiter shall, make a final determination of the items included in the Closing Statement (to the extent such amounts are in dispute) in accordance with the guidelines and procedures set forth in this Agreement and Buyer and the Representative shall cooperate with the Arbiter during the term of its engagement and shall instruct the Arbiter not to, and the Arbiter shall not, assign a value to any item in dispute greater than the greatest value for such item assigned by Buyer on the one hand or the Representative on the other hand or less than the smallest value for such item assigned by Buyer on the one hand or the Representative on the other hand and shall also instruct the Arbiter to, and the Arbiter shall, make its determination based solely on presentations by Buyer and the Representative that are in accordance with the guidelines and procedures set forth in this Agreement and not on the basis of an independent review and the Closing Statement and the resulting calculation of the final Upfront Amount shall become final and binding on the parties hereto if not already mutually agreed by Buyer and the Representative on the date the Arbiter delivers its final determination in writing to Buyer and the Representative (which final determination shall be requested by Buyer and the Representative to be delivered not more than thirty (30) days following submission of such disputed matters) and such final determination by the Arbiter shall not be subject to court review or otherwise appealable.
Believe it or not, it goes on even longer. I stopped where I did only to be kind. And to avoid personal liability.
I question why writing needs to be like that. I argue that it does not. Anyone who has the ability to parse that mess – I hesitate to say “paragraph” – also has the ability to write it clearly.
Doesn’t it really say just this?
- You have to deliver an accurate closing statement within 120 days after closing.
- The statement should follow the usual accounting rules.
- The interested parties can look at the books during the day to confirm the closing statement.
- Unless the buyer disagrees with the closing statement, it will be considered final within 30 days after delivery.
- Any disagreement can be resolved by an umpire chosen in a certain manner, whose decision is final.
Okay, that may be a little too simple. But why would lawyers write in a confusing manner?
I think that the answer must be one of the following:
(a) laziness(b) “we’ve always done it that way”(c) that’s what was in the template(d) the document had too many authors, each of whom “improved” it(e) I wanted to confuse people, for no reason except that I can(f) wait – I actually *wrote* that? Yikes!(g) we are having a contest to see who can be the most confusing writer
- Clear contract writing may not be elegant. However, it should be easy to understand. There are a few simple rules to follow when writing a clear contract:Put in some background information, for context.
- Once you say, “The parties to this contract agree as follows,” you never have to say, “party A agrees” or “the parties agree” again. You have already said that this is their agreement. No need to rub it in. Just say, “Party A will…” or “Party B will…."
- Write in clear indicative sentences: subject-verb-object.
- Use the right words. Keep them simple. Use effective, easy to understand definitions.
- Keep your sentences short. Use more of them instead of stringing them together with conjunctions. Pretend that you are paying for each word, and be stingy.
- Use subordinate clauses only when necessary. Keep them short too.
- Avoid the subjunctive mood. (Or maybe I should say, “Would that you would avoid the subjunctive mood,” or “Oh, that you would avoid the subjunctive mood!”)
- Avoid the passive voice (unless you are trying to be sneaky). “Party A shall be paid on the 15th of each successive month” is better written, “Party B shall pay Party A on the 15th of each month.” If you are trying to be sneaky, shame on you.
- Avoid legalese. If you mean “if,” please don’t say, “in the event that.” Avoid coupling “subject to” and “notwithstanding” because you’ll mess it up. Use one or the other, but lean toward “subject to.”
- Let your contract flow in a logical order. If you want to have indemnities, put them all together in one Article rather than sprinkling them throughout the contract. Put all your warranties and representations together. Put all the provisions for breach and remedies together.
- Use the word processing tools the good Lord gave us. If you use auto-numbering and formatting tools, you can build a better index and have a document that is free of formatting errors.
- Use an easy to read font. And please don’t use multiple fonts. That’s too much like wearing stripes and polka dots at the same time. Or mismatching socks.
Aren’t you glad that you write clearly? Don’t you wish that everyone did?