Transcript Why are contracts in English so resistant to Plain

The language of contracts in English
 Christopher
Williams
 20 November 2013
The context
 “any given business contract is likely to be a mess that
could do with a major overhaul.” (Kenneth A. Adams
2008)
 “The process of drafting a legal document does not
encourage tinkering.” (Howard Darmstadter 2008)
1782 (Benjamin Franklin) v. 2008 (Virtual Radiologic
Corporation). Which is which?
 NOW, THEREFORE, for and in consideration of the
premises and the mutual covenants and agreements
contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are
hereby acknowledged, and on the terms and subject to the
conditions herein set forth, the parties have agreed and do
hereby agree as follows: … IN WITNESS WHEREOF, the
parties have duly executed this Amendment effective.
 The high contracting parties reciprocally bind themselves to
the faithful observance of this contract, the ratifications of
which shall be exchanged in the space of nine months from
this day, or sooner if possible. In testimony whereof we …
in virtue of our respective powers, have signed these
presents ...
Archaic terms, binomials, redundant expressions …
 archaic terms and expressions (‘in witness whereof’)
 binomials (‘for and in consideration of …’)
 redundant expressions in general (‘the parties have
agreed and do hereby agree’).
 These features typify the language of contracts in
English and are a legacy of the Common law system.
They help to explain
 a) why the plain language movement has been more
vociferous in the English-speaking world than in most
other European countries where legal discourse tends to
be less fossilized (it may be just as opaque, but it doesn’t
sound so antiquated), and
 b) why contracts are generally much longer in English
than when drafted in, say, German, Italian or French
(Mattila 2006: 236-7).
Beginnings of the plain language movement
 David Mellinkoff, The Language of the Law,
1963
 consumer movements of the late 1960s: citizens’
rights
 1973 Citibank writes a promissory note in plain
language – ‘iconic’ (M. Asprey 2004) – important
service provided for customers
 plain language spreads to other spheres of
private law, e.g. insurance contracts
Plain language takes wing
 UK: Plain English
Campaign 1979
 Canada,
Australia, New
Zealand, South
Africa
The situation today in legislative drafting
 Offices of
Parliamentary Counsel
of Australia and New
Zealand openly
endorse plain
language drafting
 Many laws in South
Africa, including the
Constitution, are
written in plain
language
 Several pieces of
federal legislation are
drafted in plain
language in Canada
 Scottish Office of Parliamentary Counsel now
supports plain language drafting
 Westminster: recent tax laws have been drafted
in plain language, and further drafting changes
have been introduced over the last few years
 US: Federal rules of Civil Court Procedure have
been redrafted in plain language
 EU: English-speaking drafters in Brussels and
Strasbourg are currently debating how to
modernize the drafting style
Paradox
 The initial success of the plain language
movement in the legal sphere in the 1970s
was in the fields of insurance and banking in
the United States: most public authorities were
initially very sceptical about the need to
change their drafting style.
 But today drafting techniques tend to be more
advanced in legislative texts than they are in
contracts.
Why are contracts still “chockfull of the sort of
problems that turn contract prose into ‘legalese’”?
 Some types of contracts are more turgid than
others. The worst offenders seem to be
corporations. The situation is slightly better in
the sphere of consumer contracts where
sometimes legislation has intervened to ensure
that contracts are written in plain language, e.g.
the Pennsylvania Plain Language Law of 1993.
“the arms race is the reigning modus operandi”
 During the Cold War the USA and the Soviet Union
increased their stocks of nuclear missiles. Similarly,
the adversarial Common law system encourages you
to include all possible hypotheses when drawing up
contracts.
 No incentive to remove unlikely hypotheses or
convoluted language. On the contrary, there is the
incentive for everyone “to keep what there is and add
whatever they think can go wrong or might expressly
rebut some possible misreading of the contract
language” (Hill & King 2005: 182).
Bad habits
 1) the consequence of the Common law logic. In the
absence of legislation regulating contracts, the longstanding tradition is to make contracts as detailed as
possible
 2) if an expression has already been tried and tested
in the courts, why change it?
 3) ‘copy and paste’ syndrome (document
automation), particularly as regards ‘boilerplate’ (i.e.
‘Miscellaneous provisions’)
And a lack of …
 4) time. Lawyers simply don’t have the time to
devote to tidying up long contracts
 5) training. Law degree courses normally
don’t provide this type of training so novices
quickly pick up existing bad habits
 6) critical audience. Unlike most legislative
texts, contracts are not normally scrutinized
by a large number of different people
What would YOU do?
 Imagine you are a lawyer working for a large
corporation. You are asked to draft a multimillion dollar contract: Would you
a) draft it using an old-style phraseology,
knowing that it has been tried and tested in
courts? Or
b) draft it in a modern style using the
phraseology of clear, formal English, some of
which may not have been tried and tested in
courts?
The moral of the story …
 If it’s the collectivity that pays when things go
wrong (e.g. if the judge objects to the new
wording of the text), then drafters may be
more inclined to be more experimental and
innovative
 But if it’s the firm or the individual that pays,
then drafters have a strong incentive to be
more cautious
Functional or dysfunctional?
 Evidently, one must conclude that, despite their old-
fashioned appearance and their dense legalese,
contracts are still, by and large, capable of doing the
job they are meant to do.
 Equally clearly, however, there is considerable room
for improvement, since “legalese renders a contract a
chore to read, negotiate, interpret, and use as a
model” (Adams 2008), resulting in companies
wasting both time and money.
Some reasons for sticking with old formulae: the case
of shall
 Many plain language exponents propose eliminating
shall completely from legal texts because it has been
overused, sounds archaic, and may have several
different meanings. The result is that in legislative
texts in certain English-speaking countries, shall has
disappeared.
 In contracts, the situation is rather different. Kenneth
A. Adams, A Manual of Style for Contract Drafting,
2008: “The corporate bar is addicted to shall, with
business contracts exhibiting rampant overuse of the
word. It sometimes seems as if drafters fear that a
contract provision won’t be enforceable unless it
features shall.”
 “The Company shall execute and the Trustee shall,
in accordance with this Section 2.01(c), authenticate
and deliver initially one or more Global Notes that (a)
shall be registered in the name of the Depositary for
such Global Note or Global Notes or the nominee of
such Depositary and (b) shall be delivered by the
Trustee to such Depositary or pursuant to such
Depositary's instructions or held by the Trustee as
custodian for the Depositary.”
 But Adams says “the risks posed by shall can be
overstated” and the claim that it is ambiguous is
due, at least in part, “to courts having recognized
the discretionary shall for purposes of
interpreting statutes but not for purposes of
interpreting contracts.”
 In other words, in statutes – but not in contracts
– shall can sometimes be construed as meaning
may.
 Adams asserts that “many drafters consider that
stating all obligations using must results in
contracts that sound unduly bossy”
 He also contests the claim that shall should be
avoided because it is archaic: “a given population –
including the corporate bar – will develop the
syntax that fits its requirements … Business
contracts between sophisticated parties use a
language that’s stylized and limited – drafting a
contract is comparable to writing computer code. It
shouldn’t be disconcerting that in this context a word
of otherwise limited utility – shall – has come to serve
a useful purpose.”
Incentives for change
 Precisely because contracts are long and
complex companies may waste a lot of time
on drafting them
 The contract may well contain a flaw due to
its complexity which might lead to a dispute:
“much litigation has its roots in mishandled
contract language”.
The way ahead: from legalese to standard English
 “Using standard English has nothing to do with
dumbing-down contract prose to make it
accessible to the nonlawyer – an impossible notion
given that a contract is necessarily as complex as the
transaction it embodies. Instead, standard English
simply allows the drafter to articulate a transaction
without recourse to usages that interfere gratuitously
with the ability of any reader – lawyer or nonlawyer –
to understand a contract.”
Conclusions: and the future?
 If a few large corporations take courage in
both hands and decide to completely
overhaul the language of their contracts,
others may quickly follow suit
 That’s unlikely to happen in the near future,
but in the long term continued stigmatization
of the outdated language of contracts may
eventually force companies into making
changes