Like us On Facebook

What’s the deal with all these unreadable contracts and how to make sense of them

August 28, 2023 -  By Phil Harwood

(Photo: peepo/E+/Getty Images)

Have you ever wondered why some contracts are essentially unreadable? I’m referring to contracts written in “legalese” — with archaic language, bewildering provisions, and never-ending sentences.

For example, take a look at this termination clause:

Unless otherwise excluded by this agreement, the aforementioned parties hereby agree and understand that either party shall provide no less than thirty (30) days’ notice to the other party, its assigns, successors, transferees, agents, with or without cause, by written communication, such communication received by said party by mail, facsimile or electronic messaging, including but not limited to email, text message or other reasonable method recognized by industry practices.

This clause could have read: Either party may terminate this agreement with 30 days written notice. Both of these sentences say the same thing — 11 words versus 69. Which version do you prefer?

Why do we have bad contracts?

So why do many in the legal profession continue to draft legal agreements as if they lived in England 200 years ago? Many others have asked these same questions, including a growing number of lawyers. And the winds are beginning to blow in a new direction. But change is painfully slow. This is due, in part, to the following reasons.

First, most lawyers don’t draft contracts from scratch. Instead, they are copies from contract templates. It’s easier to reuse an existing template than to draft a new agreement or update a template. In many law firms, there is pressure to maximize billable hours and revising a template is not a billable activity. It’s simply easier to keep using an existing template, even if nobody can understand it.

For example, one of my clients recently sent me a contract provision to review. The first paragraph consisted of one run-on sentence with 222 words. That’s right: 222 words. Even worse, 48 words separated the object and verb. I only understood this nightmare of a sentence after carefully dissecting it to parse out its hidden meaning. Nobody in their right mind would conclude this was good writing. And yet, here it is, being recycled because it’s the easy way out.

Second, some lawyers may not realize their existing contract templates are bad. They have become numb to seeing legalese and may even falsely believe that fancy words make their contracts more impressive or enforceable. However, the opposite is true.

For example, many contracts use the word “shall” throughout the document, often improperly. Why do they do so? And what does shall mean? Does it mean must? If so, why not just use the word must? Surprisingly, some U.S. courts have held that “shall” could actually mean “may,” depending on how a contract uses it in a sentence. In fact, there are three distinct meanings of the word “shall.” Lawyers often use the word erroneously — not realizing what they’re doing. Some other countries no longer use this word in legal writing to avoid ambiguity. But the U.S. is not one of them.

Third, it takes skill to redraft contract templates. Not every lawyer possesses the required skills or understands the canons of construction and judicial interpretations of contract language. Law schools do not require contract drafting. And yet, one errant “shall” or misplaced comma may alter the meaning of an entire contract provision.

Fight back

So, what does all of this mean? It means that everyone involved in the contracting process has an opportunity to replace outdated, poorly written contracts with those written in plain language so everyone can understand them.

Take a look at your contract templates. Are they in need of revision into plain language? Are you signing contracts written in legalese that you don’t understand? If so, don’t just accept the status quo. Expect contracts written in plain language. Ask for explanations of provisions that you don’t understand. And revise your contracts so that you promote the plain language movement.

Now go forth.