I should admit some predilections. First, I believe the best policy is to operate under the assumption that the lawyer who is representing the other party to the transaction is an able lawyer. This approach is a sort of “golden rule” of drafting. Unfortunately, it is followed by many lawyers as infrequently as “do unto others.” Operating on the assumption that the opposing lawyer is a dolt may lead the drafting lawyer to put provisions in drafts that are one-sided, if not onerous. In the belief that the other side will not object to the onerous provisions, the drafting lawyer will hope to maximize the benefit to his or her client. In reality such an approach may create hostility. The negotiation of the document with an able lawyer could cost the client much more in fees than it should have.
Second, I enjoy drafting. When I was in law school and a law firm interviewing there asked if I liked to draft, I was shocked. Who drafted legal documents in law school? Who knew anything about it? I had no idea at that time that memorializing the agreement between parties to a transaction could be one of the most intellectually challenging tasks a lawyer can perform.
The Functions of Drafting
The purpose of drafting is to memorialize the agreement of the parties to a transaction. There is a reason why so many agreements use the archaism “Witnesseth.” (More on archaisms later.) The written document reflects an agreement that the parties have made, either orally or by an exchange of letters or term sheets. Memorializing that agreement remains the goal, whether drafting a contract for the purchase and sale of real estate, a lease, documents evidencing and securing a loan or any other agreement. The principal role of the drafter is to ensure that the intent of the parties is recorded in the written instruments they will sign. A document that does not meet this requirement will, at best, cost the parties much time and money correcting the error or, at worst, lead to litigation among the parties to establish their intent.
Lawyers drafting documents and reviewing other lawyers’ drafts have other roles as well. They must recognize or anticipate the potential pitfalls of their clients’ agreements and seek to draft the agreements in a way that avoids those pitfalls. Of course, the agreement of the parties may deal with known problems. For example, the parties may recognize that the property has environmental issues that must be resolved as a condition of closing, or a party leasing a building may know that impediments to access by people with disabilities must be removed. More often, however, the lawyer for one party or the other raises those matters in draft documents. The drafter must steer his or her client away from the risks inherent in the parties’ agreement. In this process, the skill of the drafter is most valuable.
A third role of the drafter is to seek certain advantages for his or her client. I do not mean to imply that the drafter now has the right to violate my “golden rule,” but each drafter has a certain license to prefer his or her own client. Certainly, a lawyer drafting a lease for a landlord will use a form that is not totally evenhanded; it will be a so-called “landlord lease.” Similarly, lender forms can be expected to prefer the lender. The lawyer presented with these documents for review should recognize that condition and attempt to negotiate final documents that favor his or her client or are, at least, more neutral. That lawyer’s success will depend on the bargaining power of the respective parties to the transaction.
In preparing to draft, where do we start? Usually forms are available from a variety of sources. There are form books galore. There are forms drafted by bar associations, title companies, banks, trade associations and legal form companies. There are also forms drafted by other lawyers in one’s firm, which can be found in form files or on the computer.
How good are these forms? The quality varies. Some are old and use language that is archaic, formulaic or unclear. For example, referring to “the party of the first part” and “the party of the second part” is confusing and silly. Some forms are totally one-sided and do not even pretend to be otherwise. Many forms are verbose, inherently ambiguous, unnecessarily long and contain errors. They may not reflect the law in the jurisdiction where the agreement is being made, or they may contain provisions that have been declared unenforceable.
Forms, even those printed in form books, were not written by some supernatural being; they were written by human beings, people prone to incomplete information and error. Nonetheless, we should recognize that a psychological barrier to critical judgment is created simply by the fact that a document has been printed. The drafter should be aware of this barrier not only when reviewing a form to be used in drafting but also in reviewing another lawyer’s draft that appears to be on a preprinted form. Most important to remember, however, is that the creator of the form did not know the terms of your particular transaction. There is no substitute for having the agreement and intent of the parties clearly in mind and giving thorough and thoughtful consideration to the chosen form.
That said, good forms are very useful. They cut the time required to draft documents; they highlight matters to be considered that might otherwise not occur to the drafter, however experienced or skilled; and they create uniformity when that is a consideration. If a lawyer is hired by an owner of a multi-tenant office building to draft the leases for that building, it is essential that all the leases be on a single form. Uniformity is required for lender approval and, more importantly, is essential for the management of the project. The lawyer representing that owner might also have a set of standard inserts or riders to deal with changes frequently negotiated by tenants’ counsel.
Nevertheless, no matter how familiar the drafter is with the form and the inserts, it is still essential that those forms be reconsidered with each transaction to assure that the appropriate changes are made to address the particular deal points and the particular situation and to incorporate new ideas. In the leasing example above, it may be wise for the drafter to provide the client with a lease requisition form, on which the particulars of the deal may be inserted so as to minimize the chance of error, highlight the issues and reduce the number of communications.
An experienced lawyer may customarily use his or her own forms, created from other forms but revised over the years to meet problems that have arisen or to reflect that particular lawyer’s ideology or his or her client’s way of doing business. Those forms are subject to frequent revision as new issues arise. Less experienced lawyers may not feel confident enough to do major revisions in others’ forms and to make them their own. Still, every drafter is obliged to use judgment in using forms and to make those changes that the drafter believes are warranted under the circumstances and that are necessary to establish a tone consistent with the transaction. Gradually, those revisions will become standard to the drafter and a new form will emerge, particularly when one can summon up one’s latest work product on the computer.
There is a trend for newer forms to be particularly onerous to the non-drafting party. Although in the short term this approach may appear to be profitable for the drafter, it is not really in the best interest of the client. Much legal time and client expense is required to negotiate an evenhanded deal. Even when the opposing party does not have the economic clout to negotiate the document toward the center, the opposing party may legitimately be angry about the manner with which it was dealt.
Drafting for Clarity and Drafting for Readability
By “drafting for clarity,” I am referring to drafting without ambiguity. By “drafting for readability,” I am referring to the goal of making the document comprehensible. These goals would seem to be compatible, but that is not necessarily so.
Take so-called “plain English” documents, for example. Many traditional legal phrases are still very useful and, in most cases, are less verbose than the plain English translation. Try rendering “anything in section 9 to the contrary notwithstanding” into plain English. The point is that legal language is useful. It has been used for many years and has, in many instances, actually been tested in litigation. Although to many who do not deal in legal documents the language might seem to be obtuse jargon, to businesspeople who must read and understand agreements and other documents as part of their daily work, the language becomes as familiar as any other form of writing.
This is not to say that old forms of drafting are necessarily the best. Archaisms are particularly objectionable. Terms such as “Witnesseth,” “Whereas,” “Now Therefore” and “In Witness Whereof” relate back to the time when a contract was thought of as a single sentence, with the word “Witnesseth” being the verb of that single sentence. Obviously that type of drafting contributes nothing but excess verbiage to what is most likely too long an instrument. Such archaisms are best omitted. Nevertheless, it is often appropriate and even helpful that an agreement tell the “story” of the deal. Instead of “Whereas” clauses, it may be useful to include a series of recitals, each preceded by a capital letter. Consideration is still required for a contract, and that should be referred to, even if it is a nominal sum and the mutual undertakings of the parties.
• Grammar. The most valuable tool in drafting, both for clarity and readability, is good grammar. The drafter, if he or she does not have a good grounding in grammar, should really bone up on it or read some books on style in writing. This is not to say that the style of writing recommended for a novel is appropriate for legal drafting. For example, commas are very useful in separating concepts and ensuring clarity, even though books on style may not encourage the use of commas in the same situations. Close quotation marks are an example. In most situations it is more useful to place the comma or period outside the marks, but that is anathema to grammarians. Nevertheless, an understanding of the elements of style is most helpful.
• Antecedents. The use of antecedents is closely related to grammar. An antecedent is a word, phrase or clause to which a pronoun refers. An antecedent is also a word, phrase or clause that is qualified or modified by succeeding language. Proper identification of antecedents, even at the cost of repetition, is of critical importance in drafting clear documents. Failure to do so creates one of the most common types of ambiguities and can give rise to much dispute and litigation.
A wayward “it” or “they” or the failure to specify which of a series of words or concepts is referred to or qualified by succeeding language can create disputes over material parts of an agreement. An example: “Landlord shall have the right to enter the Premises with prior oral notice during regular business hours, except in an emergency.” Does the phrase “except in an emergency” modify only the latter qualification of the Landlord’s right, namely the limitation of its right to enter only during business hours, or does it also modify the right to enter without prior notice? The drafter must always consider whether a word, a phrase or a clause is subject to two or more interpretations.
• Definitions. Frequently used terms should be defined at some point and later used with an initial capital letter. Many documents start out with a whole series of definitions. This practice may be a boon to clarity but certainly does nothing for readability. Focusing on a series of definitions is difficult when one does not have an understanding of where the defined terms fit into the agreement. It is like reading a list of cities before being presented with the map that locates them. However, if the drafter waits to define the term until its first use in the document (which is more customary in a brief instrument), it will be difficult for the reader to find that definition when he or she has reached the next use of that term much later in the document. I propose a simple solution: when a term is defined and followed, as is customary, by a parenthetical defined term, that term should be underscored in the text to make it easy to spot (e.g., the “Owner”), and a glossary should be appended to the document and the location of the definition set out in the glossary.
• Calculations. When a calculation is called for in a document, there is an opportunity for ambiguity. I find it useful to describe exactly how the calculation is to be performed. Old terms such as quotient, difference, total, fraction, numerator, denominator and the like, which were learned in arithmetic, are useful. An example in the document also may prove invaluable.
• Brevity. Besides being the soul of wit, brevity is also the soul of clarity and readability. It also is essential for both the length of the document and the length of its component parts.
The smallest component of the document, other than the word, is the sentence. Sentences with various clauses and provisos are an integral part of legal drafting. But to the extent consistent with the desired meaning, the drafter should write in short, expository sentences. An old method of drafting, in which every paragraph is a sentence (and the next paragraph starts with the word “And”), may be relatively unambiguous, but it does nothing for the readability of the document. When a series of provisions or alternative provisions is included in a sentence, each provision should be preceded by a letter or number, in parentheses, to avoid ambiguity. Similarly, when using the phrase “the lesser of” or “the greater of,” it is advisable to use letters or numbers in parentheses to separate them, such as in “the lesser of (a) the cost of remediation or (b) the sum of $100,000.”
The next larger component is the section or paragraph. The document should follow a sort of outline form, with groups of sections pertaining to a subject matter being in the largest group (often called an article), followed by sections, subsections and so on. For ease of reference in other portions of the agreement (or in later amendments of the document), a number or letter should precede each section and subsection. That practice avoids the necessity of referring to such provisions as “the third grammatical paragraph
of section 3.”
• Length. How long should the instrument be? It should be long enough to document the agreement of the parties. It must also protect the drafter’s client from possible adverse consequences. Most documents are too long, and they are growing. They contain provisions that are onerous, redundant, unnecessary and inappropriate.
I have already discussed my “golden rule” about onerous provisions. Nevertheless, many documents contain them or at least contain provisions that are “throwaway clauses”—provisions included for the purpose of having something to negotiate out of the document. These may be useful in a situation where the parties have relatively equal bargaining power. If the drafter tenders a document that is perfectly evenhanded, not only may he or she shock the opposing lawyer into seizures, but that opponent will have no ammunition, nothing to discuss.
A limited number of throwaway clauses is not objectionable, if the clauses are not too obvious or too onerous. If they are not negotiated out of the document, they may give the drafter’s client some advantage without hurting the other side too badly. If, on the other hand, the drafter’s client has a substantial economic advantage, such as a landlord in a shopping center who is negotiating a lease with a small tenant, throwaway clauses will simply bully the opponent and violate the “golden rule.” Also bear in mind that one party’s throwaway clause may be another party’s deal point.
Redundancy is also a problem and often an unintended one. Documents frequently are drafted by incorporating applicable provisions from various prior documents. This is a useful but dangerous technique. Aside from the obvious need to conform defined terms (as in making certain that “Landlord” is used uniformly and not interchanged with “Lessor”), it is very important that concepts that are repeated are totally consistent. Inconsistency is a fertile ground for litigation. Better practice may be simply to cross-reference.
A document often contains unnecessary provisions that lengthen the document inordinately. My favorite example is the provision that permits documents to be signed in counterparts. The Statute of Frauds requires only that a document be signed by “the party to be charged.” It does not require that all parties physically sign the same copy of the document. Notwithstanding that, one often sees counterpart language that is several sentences long.
Likewise, drafters often include language that is inappropriate. I believe that a lay person’s warranty of the enforceability of a document should never be included. For one thing, such a warranty constitutes a legal conclusion, not a factual statement. Secondly, it does not usually contain the numerous qualifications that lawyers customarily include in enforceability opinions, rendering the warranty far too broad.
Another provision that is used indiscriminately is the default phrase: “or an event which may, with notice or expiration of time, or both, become an event of default.” That phrase, which is ambiguous to start with, is often used in situations to which it does not really apply. Even more serious is the piling on of warranties, some of which are not only inappropriate but also onerous.
How do documents get too long? Lawyers are notorious copycats. When they see language in another lawyer’s draft, they often incorporate it into their own forms and documents. In many cases, copying is advisable because new language frequently results from the rethinking of old ideas, reaction to court rulings or simply a decision that a bad thing that happened to one’s client will never happen again. However, the new language to be incorporated may be onerous, redundant, unnecessary or inappropriate. Just as one should not assume that one’s opponent is a dolt, one should not assume that the creator of new language is omniscient. There is no substitute for the drafter’s own careful analysis and consideration.
Drafting is not easy. It requires careful and thoughtful consideration. Forms are helpful but must not be used uncritically. Time and effort are essential. Still, the drafting of clear and readable instruments that appropriately meet the needs of the drafter’s client and properly document the agreement of the parties is one of the most intellectually challenging and rewarding aspects of the transactional lawyer’s career.