Drafting Contract - Introduction

INTRODUCTION TO CONTRACT
DRAFTING
Advanced Guidelines For Contract Drafting
And Review

Introduction To Contract Drafting
Advanced Guidelines For Contract Drafting And Review
Approximate reading time : 15 minutes
One of the biggest challenges that first timers face while drafting or editing a contract is the
fear of making mistakes. While you may read, understand and criticise a contract, this fear
prevents you from typing a single word of the contract.
You want to study more, read more, review more and write less. You may also be guided by
the contracts you have seen earlier to insert more legalese and jargon.
However, you need to do exactly the opposite. Your contract needs to be simple and
understandable for anyone. This will involve forgetting some prior notions of using
complicated terms or using language in a smart way, that could trick a reader.
Remember that if both parties are clear about the meaning of various terms, chances of
ambiguity, confusion and therefore, disputes, are low.
Learning Objectives
This chapter develops the concepts from the previous chapters and explains in detail how
to use language and grammar to ensure that your drafts are simple for anyone to read and
understand, accurate to your intention and accordingly effective. You will learn:
1. How to use active and passive voice, tenses, conjunctions, dates and values to
express your intention without ambiguity;
2. How to avoid jargon and keep your contracts clear, tight and understandable;
3. When and how to use subjectivity or include subjective standards in a contract to
benefit your interest; and
4. Different levels of review of contracts.
There will be reference to different kinds of clauses in a contract, so you must keep
referring to the chapters in the next module, if you are unable to understand the meaning
of a clause.
1. Active vs. Passive voice
Passive voice makes sentences complex and indirect. In this structure, the doer of a
particular act or a job, i.e. the person on whom the responsibility is placed, is often
difficult to identify.
On the other hand, framing a sentence in active voice intrinsically ensures basic
clarity.
For instance, “the start date of the construction is to be decided” is a very confusing
statement (written in passive voice) which does not clarify that who will decide the
date of construction. Now, if we write the same sentence in active voice “the
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Introduction To Contract Drafting
Advanced Guidelines For Contract Drafting And Review
contractor will decide the start date of construction”, this makes it clear that it is the
responsibility of the contractor to decide the start date of construction.
It is appropriate to use passive voice only when it is more important to mention and
focus on what was done or not done and where the person responsible is not
required to be identified or focussed on.
2. Avoid use of archaic language and jargon
“ If the language is not correct, then what is said is not what is meant. If what is said is not
what is meant, then what ought to be done remains undone. ”- Confucius
This quote quite evidently brings out the importance of language. An individual is
exposed to a myriad of challenges in terms of the language used for drafting. For
effective drafting, legalese should be replaced with simple words, long sentences
should be made shorter and simpler and most importantly, pretentious and verbose
expressions should be trimmed town.
Examples of archaic words
Words like however, thereafter, herein are not commonly used in English language
but are excessively used in contracts, policies, notices and replies. One should
abstain from using such words as they are effete substitutes of proper pronouns.
Sometimes they also lead to ambiguous references. Example of archaic words:
1. Above
2. Above mentioned
3. Aforementioned
4. Aforesaid
5. Before- mentioned
6. Henceforth
7. Hereby
8. Herein
9. Hereof
10. Hereto
11. Hereinafter
12. Hereinbefore
13. Herewith
14. Said
15. Same
16. Such
17. Thereof
18. Therewith
19. Whatsoever
20. Whomsoever
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Introduction To Contract Drafting
Advanced Guidelines For Contract Drafting And Review
It is possible to replace the archaic words with simpler words. Examples which show
the use of these words and suggested alternatives are below:
1. Hereby
Archaic: - Each party waives its right to a jury trial with respect to the
transactions contemplated hereby.
Suggestive: - Each party waives its right to a jury trial with respect to the
transactions contemplated by this agreement.
Replacement of “ Hereby ” with “ by this agreement ” makes the provision more
definite and specific.
2. Thereof
Archaic:- The Escrow fund shall be held by the escrow agent under the escrow
agreement pursuant to the terms thereof.
Suggestive:- The Escrow fund shall be held by the escrow agent under the
escrow agreement pursuant to its terms.
“ Thereof ” can be replaced with “ its ”. Alternatively, determine what thereof
refers to and create a prepositional phrase beginning with ‘of’ and ending with
the thing to which thereof is referring.
3. Choose verbs that are consistent to your intention
Verbs express the nature of the obligation of the parties and inaccurate usage of
verbs can destroy your draft. A few pointers for using verbs effectively are provided
below.
UseofShall
As a simple rule, use ‘Shall’ to indicate the binding nature of something.
Shall is a mandatory word and the subject of the sentence should be obligated to do
something as a result of " shall ." The most simple test to see if " shall" is used correctly
or not is to check if “shall” can be replaced with “ has a duty to” . Use shall to indicate a
covenant. A party’s name should always precede shall.
UseofMay
“ May ” suggests a discretion or possibility, but no binding obligation. For example,
consider the following clause of an employment agreement:
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