I practice one of the least exciting areas of law. At least in the eyes of those who ask me, almost every other day or so, “what area of law do you practice?”
“Contracts,” I say. “Leases, amendments, assignments, and so on. All contracts.” Their eyes glaze over, and they ask if I like it, or say something profound like “That sounds interesting.” Yep. Very interesting. They say it because it’s not, and because they all remember how often they have had long contracts and agreements thrust in front of them for their signature. Mortgage contracts, rental agreements for their apartment, student loans and auto loans, sports disclaimers for their softball rec league, and, almost ubiquitous on the web, those long wordy disclaimers that pop up so often we open a new profile on a social network site, be it Facebook, eHarmony, Twitter or any number of related sites. Contracts are everywhere, and yet, no one reads them.
Well, I shouldn’t say that. Some people read them. Lawyers read them. And lawyers draft them. I draft them.
As one friend astutely and succinctly pointed out, a contract is the agreement between two parties to do or give something for or to the other in exchange for something else. More specifically, Bryan Garner’s definition in “Blacks Law Dictionary” states that a contract is
1. An agreement between two or more parties creating obligations that are enforceable or otherwise recognizable at law.
It’s also the writing that describes that agreement. (To extrapolate all the different nuances and types of contracts, Garner takes up a full seven and a half pages. But that’s neither here, nor there…) It’s that writing that I deal with at work most days, and it’s that writing that people tell me “sounds interesting.”
Common and ubiquitous as contracts are, a poorly written contract can, and often does, result in trouble, especially if the deal goes south. A well written contract, on the other hand, like a good fence between neighbors, helps parties to get along, determines and defines what should happen when there are problems between the parties, and describes what should be done to resolve the problem.
To that end, I ran into a useful article by Susan M. Chesler, published in the March 2010 ABA magazine GP Solo. (A slightly modified version of the article can be found here.) Her recommendations have been helpful to me to make sure the contracts I read, draft, edit, and forward for execution are useful to my clients’ relationships and businesses.
- Think through the life of the contract under various situations, or fact patterns. Every contract should answer 1) who is obligated, 2) what is the obligation, 3) by when must the obligation be done, 4) where, 5) how, and, if any money is involved, 6) how much? See a pattern here? The follow-up is: what if there is a lack of performance and default? What happens then? And, in the worst case, what if the parties become hostile towards each other, does the contract provide enough guidance to govern the relationship?
- Clearly and consistently set forth the parties’ rights and obligations. Make sure the language and obligations are consistent and use the same terms through out the contract, and define the terms clearly. When a party has an obligation, use the word shall and never use shall for any other reason.
- Understand every provision of the contract. If you don’t understand what you are drafting or reading, there’s a good chance that the language can and will be misinterpreted, likely to your clients’ detriment.
- Use recitals and definitions to reflect the parties’ specific transaction. The recitals are not a part of the operative terms of the contract, but they provide the “story” to demonstrate and state the parties intentions upon entering into the contract. By crafting the definitions, it allows the drafter to tailor the meanings to the purposes of the contract and prevent inadvertent, or intentional, changes of language.
- Use plain language. The contract should be easy to read by audiences both legal and lay alike, says Chesler. Make it easy to read. Enough said.
- Use proper grammar, a clear writing style, and logical organization. This should be obvious, but in case it’s not, proof read! And get another pair of eyes to look at it. Draft it in the present sense, organize it clearly. One tool my employer has integrated into our contracts is to put in the first section of our leases a list of all the main points of the contract, the “businesses terms,” we call it, that can lay out very clearly for any reader the obligations and requirements of the parties. It helps the parties quickly determine what their obligations are, and I think it has served us well.
Writing, and reading, contracts may not always be fun, but it is important. Practicing care with the drafting can make sure the transactions for our everyday lives are more fluid and less conflicting. Whatever your role, makes sure your contracts are carefully drafted, and if you ever need any help–go get a good attorney. It is interesting work. To us.
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