SOCIAL CONTRACTING: Six (6) Contract Writing Tips to Avoid Ambiguity – and Litigation
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Six (6) Contract Writing Tips to Avoid Ambiguity – and Litigation Written by Lisa Cohen
There is a reason that contracts are full of legal language. They are, after all, legal documents. But the fact that contracts are legal documents is all the more reason to make sure that language is precise. When contract language is imprecise, or worse, incomplete, the door opens to ambiguity and misinterpretation that could lead to disputes. I've seen a lot of contracts, and know nothing is worse than foggy language. Believe it or not, good contract management often has to start with actually cutting words from your contracts. Cleaning up contract language helps avoid headaches – and litigation – should any issues with the contract arise. Consider these tips: · Define your terms… If you're using complicated terms, or terms with multiple meanings, define them. A term that has more than one meaning – whether on its own or in relation to different areas of your business – carries the risk of misinterpretation by someone reading the contract. With a CLM system, defining your approved terms becomes much easier. You can designate "shared objects," standard approved language, and required elements for all or certain contracts, which ensures everyone across the business is on the same page. · …and keep them consistent. Both throughout the contract and across your organization, contract terms should be used consistently, with no substitutions. For instance, as Lawyers.com advises do not alternate between calling the subject of a sales contract "goods" and "items." Define one term and stick to it – in your CLM system,
SOCIAL CONTRACTING: Six (6) Contract Writing Tips to Avoid Ambiguity – and Litigation
Page 2 you can even flag certain words for further scrutiny if they're commonly used substitutes for the approved terms. This also applies to the names of contract parties – keep one single database of all the people and entities you do business with, to make sure legal names are always correct on your contracts. · Use templates. To assist in keeping terms consistent, create templates for common contract types within your contract management system. Make sure to designate required fields and even titles so that nothing is overlooked in the creation of a new contract. Store them in the cloud for easy access and to avoid errors that can occur when there are multiple versions floating around on different machines. · Be objective. Flowery or complicated language can obscure what the contract requires of the parties entering into it. There are times when contract drafters are intentionally ambiguous as a way of avoiding confrontation, or perhaps leaving wiggle room to argue for a particular interpretation. Don't do it, says Fayola Yeboah, contract manager for Enterprise Rent-A-Car's European operations. The contract should reflect the intentions and obligations for both parties. The best way to accomplish that goal is to be clear and objective: for instance, if someone is obligated to perform a task each week, Yeboah notes, don't use language like "use reasonable efforts to do x" to describe that obligation. The person "will do x," plain and simple. · Be concise. Being concise ensures that the contract is straightforward and understandable and also does not create any inadvertent obligations, conditions, or distinctions, attorney Matthew Hickey explains in a blog post about contract language. Lawyers.com states that you should assume the reader of a contract is a knowledgeable layman: "If your writing is so clear that a layman could understand it, then it is less likely it will end up in court." Again, using simple templates can help with this. · Keep risk and potential litigation in mind. Leave no room for any reasonable person to interpret something differently than it was intended. Write for the judge and jury, without assuming even that the rules of grammar are universal. No matter who is reading the contract, in whatever context, its meaning should be clear. Also, as FindLaw points out, in the event of litigation there is sometimes dispute over which state's laws govern the contract – so be sure to define this. Ambiguity in contract language can lead to errors, misinterpretations, and litigation down the line. Clear and precise contract language can avoid those problems, or at least lay out a path for resolution when problems arise. When both parties understand the terms of the contract, both parties come away happy. And that's good business. To learn more about the importance of contract language and how CLM software can help keep your contracts clear and consistent, contact us.
SOCIAL CONTRACTING: Six (6) Contract Writing Tips to Avoid Ambiguity – and Litigation
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