Contracts are essential documents for any business deal, but they can also be confusing, intimidating, and hard to understand. If you want to avoid misunderstandings, disputes, and legal risks, you need to make your contracts more readable. Here are some tips on how to do that.
In order to make a contract more readable, it is essential to use plain language. Plain language is straightforward, concise, and free of legal jargon or obscure terms. This makes it easier for readers to comprehend your intentions, duties, and rights without requiring a lawyer or dictionary. To utilize plain language, you should make use of short sentences and paragraphs, utilize active voice rather than passive voice, select common words instead of technical terms or acronyms, define any industry-specific or contract-specific terms, and stay away from ambiguity and double negatives.
A contract should use clear language, avoid unnecessary jargon or legalese, and define technical terms to assure mutual understanding in order to make it readable and easily comprehensible. A section including clear definitions of key terms used in the contract as well as interpretations for any ambiguous terms or phrases should be included. For clarity, the sentence structure should be made simpler by breaking lengthy sentences into shorter, more manageable ones and making sure that each sentence expresses a single point. Including a glossary of industry-specific terminology in a contract can also help to guarantee that all parties are using the same vocabulary and that it is easy to read.
Make sure that the agreement will be clear to a person not involved in negotiations. Assume that it will be read by others in times when you will not remember what were "intentions of the parties".
The premise of this is noble but it has to be tempered with a dose of outside world reality. If the purpose of the document is to get a department to give you something by a certain date as an agreement (loosely called a contract) then this is plausible. Most of the time in the legal world they call them Memorandums of Understanding. EX: you will provide me with X research data in 30 days and I will provide you with a 20% discount on your purchase of the loaned technology to do the research for your publication. (very rough example). Contracts have their place and legal language locks performance in by the parties or legal consequences. We all know what "time is of the essence means". Both parties know delivery is a key element. To
Headings and subheadings are a great way to make a contract more readable by organizing it into sections and subsections, and highlighting the main points and topics. Descriptive titles should be used to summarize the content of each section or subsection, while consistent formatting and numbering should be used for the headings and subheadings. Additionally, white space and indentation should be used to separate the headings and subheadings from the text, as well as cross-references to link related sections or subsections. This will help readers navigate the contract quickly and easily in order to find the information they need.
The contract should be properly arranged with headings, subheadings, and bullet points to break down complex information so that it is easily understood. The clauses should be placed in a logical sequence, either chronologically or by topic. It would be wise to use bold or italicised language to draw attention to the important terms and conditions in the key provisions, and a summary in form of a list or table the most important obligations should be included. Depending on the type of contract and industry, it may be beneficial to include a brief summary or executive overview at the beginning of the contract for a quick overview highlighting key obligations and responsibilities.
Use plain language, avoiding legal jargon. Opt for short, clear sentences. Prefer active voice over passive. Organize content logically with related clauses grouped. Implement descriptive headings and subheadings. Use bullet points or lists for clarity. Avoid double negatives. Clearly define specialized terms. Utilize examples for complex points. Be consistent with terminology. Choose a readable font and adequate spacing. Highlight key information sparingly. Include a summary of main terms. Regularly update for relevancy. Ensure user-friendly design and layout. Seek feedback for improvements. A balance between accessibility and legal precision is crucial, often requiring a legal professional's review.
Tables and charts are a great way to make contracts more readable by presenting complex or numerical information in a simple and visual way. Not only do they help to compare, contrast, or illustrate different aspects of your contract, but they can also save space and avoid repetition in your text. When using tables and charts, it is important to ensure that they add value and clarity to your contract. Additionally, be sure to label them clearly and include captions or explanations if needed. Furthermore, align them with your text and use consistent and appropriate fonts, colors, and styles for your tables and charts. Lastly, make sure not to split them across pages.
I have used charts to illustrate the consequences of performance under the contract. They can readily hone in on what will happen if a party fails to perform in a well written\organized chart.
Making a contract more readable can be achieved in a fourth way by using bullet points and lists. Breaking down long or complex sentences into smaller and simpler units, bullet points and lists can emphasize or highlight key points in your contract. Additionally, they can make your contract more scannable and readable. When using bullet points and lists, it is important to ensure they make sense and improve your contract. Additionally, parallel structure and consistent punctuation should be used for bullet points and lists. For ordered or sequential lists, numbers or letters should be used, while symbols or dashes are best for unordered or non-sequential lists.
In the U.S., contracts tend not to contain as many paragraphs / bullet points as English law contracts. This is not to say that one method of drafting is better than the other. In highly specialised fields (eg. Finance, technology), there can be industry template forms of documentation which lean towards either a US style or English style of drafting. Keeping close to the industry standards is key in order to enhance predictability of remedies and secure reliable outcomes.
Concise statements without ramble is key. If bullets and lists help one accomplish this, then use them. The key is to make sure yourn summary language is concise and easily understood.
One more way to make a contract more readable is to include examples and scenarios. These can help to demonstrate how your contract works or applies in real or hypothetical situations, as well as clarify abstract or technical concepts. When using examples and scenarios, it's important to ensure they are relevant and helpful, and that you use brackets, italics, or quotation marks to distinguish them from your text. Furthermore, your examples and scenarios should be realistic and specific when possible, with hypothetical and general ones used only when necessary.
This point is very specific to the 'nature of comtract'. If you're making a contract for IP and there are elements pertaining to recoupment of payments, it is advisable to provide an example so that there is no ambiguity left.
In a contract sense, this can be a slippery element to use. If one is not careful they potentially may not fully communicate a point clearly leaving the interpretation of what needed to be done open to misinterpretation. This leads to nonperformance to the desired outcome and potential conflict between the parties.
In my experience, to ensure a contract is more readable, one should: *Avoid long sentences which do not serve to nothing but misinterpretations; *Determine headings of the sections consistent with the provisions they are incorporated; *Pay attention to correct numbering of provisions so that they constitute a consistent order; *If possible, avoid cross references to the same agreement’s other articles within the context to prevent possible errors, confusion and ensure clarity in interpretation; *Where it is necessary to use cross-references, check them and make sure that they always correctly used; *Give time to understand the aim of the parties, make sure that the contract reflects the facts clearly.
Standardization. Surprisingly, this is not a common practice. When we refer to contracts, we refer to legally binding agreements. In many cases with global platforms, the contracting entity is more concerned about risk Mitigation and budget rather than the scope. If we standardize the verbiage across like contracts, we open up the opportunity to focus more on the scope of work detailed in the contracts with Standardized Mitigation practices outlined. This will allow for a more streamlined review and more funds being allocated to the work, versus understanding what the document is asking for. Another opportunity is to utilize the capabilities of AI. AI can be an extremely powerful resource if used correctly.
Organizing that makes sense and doesn't lead to related provisions separated in the document. Or, if necessary, cross reference the section so it's not a truffle hunt.
I agree that the potential use of plain language will make the writing of these agreements and the sending of them to parties for ratification easier and is a way to attempt to center in on what Sarim stated when he said "..the contracting entity is more concerned about risk Mitigation and budget rather than the scope"... As I have stated before, legal language tends to be paramountly necessary so no ambiguity is contained in the document. The more complex and revenue impactful the agreement, the more the legal terms and language will win out as the language used.
Framing the business in a positive light does a lot more than simply having numbers, as numbers cannot always show what's actually happening as humans we need to render the human part of any business is creating happiness with those you do business with.. either employees or business partners or customers.