How to shrink your contracts — so that your business booms

Jayne Dalmer | August 3, 2017

My utopia is two non-lawyers sitting over lunch, and reading the document, understanding it, and signing it.

My utopia may have a few more foreign language films and chocolate biscuits. But I’m with Shawn Burton, then Digital Solutions general counsel at GE Aviation, when he described how GE reduced several legal contracts to just one — from over 100 pages to 5.

Clarifying and simplifying the contract meant their salespeople could seal the deal with more customers. And with the new contract, negotiating time was down 60 percent.

Other industry players responded enthusiastically. Head of Legal at Qantas Airways Ltd, Nick Brodribb, said:

“Australian lawyers have for a long time been dealing with redundant language in US legal contracts. The drive towards plain English we have seen from GE, along with companies like Airbnb, gives us great hope for the future.

Plain English should save time on the front end of a transaction, which allows the business to get into the project quickly, to manage it more easily, and potentially to resolve disputes sooner.”

Get to A for agreement before your customer gets to ZZZZ for a sleep. Image by Pixabay / CC0

Customers want clarity

Customers are demanding the right to easily understand legal contracts. And courts are more willing to hold that contracts can be unenforceable because people can’t understand them.

We live in a highly connected society that is saturated with information. The nature of digital information leads to greater immediacy and transparency. Readers trust companies who communicate clearly.

Contracts in plain language are fairer for all parties

Contracts are working documents and binding guides to action. They need to engage people to read and understand them. Contracts in plain language can improve relationships, minimise risk, and prevent frustration.

And a plain language contract is not just a goal in itself — plain language contracts can help an organisation do its job better, whether that is serving people, making money, or both.

Think, plan, and organise for readers

Plain language is shorthand for planning, organising, writing, and presenting a document to suit the needs of readers. It’s not just about removing legalese.

Broad guidelines for plain language contracts are to:

• plan, design, and organise the contract around the reader’s needs
• construct sentences and choose words that are clear and precise for typical readers
• test mass documents on typical readers.

A plain language contract should have:

• a simple overview of who is hiring who, what they’re being hired to do, when, and for how much
• what both parties agree to do
• what their responsibilities are
• the specifics of the deal
• what is, and what isn’t, included in the scope
• a simple overview of liabilities and other legal matters.

Clarity is a point of difference

A strong business trend towards simplicity also demands plain language — it’s no longer an optional extra. Writing clear contracts to suit the needs of readers strengthens relationships with clients, saves time and money, and boosts efficiency. Companies are recognising that plain language is something that can define them.

Accuracy and logic come first

As legal experts, lawyers are rightly sensitive about accuracy and logic. Plain language doesn’t meddle with that expertise, but does mean that it is communicated well. Text in plain language exposes any flaws in the logic of a line of thought. Complex ideas cry out for clear, simple, transparent prose. Presenting a complex topic simply to other experts and non-experts demands great skill. Every one of us can do better at stripping away clutter and ambiguity — some people describe this as ‘pulling out the weeds to see the flowers’. What remains is uncluttered and clear.

Tips to transform legalese into reader ease

Here’s our advice on how to turn a turgid document into a contract that’s clear, credible and compelling.

Play to your audience

Keep the needs of your primary audience and secondary audiences in mind. Write for the audience that is least likely to understand.

Have a clear purpose

What do your readers want to do with the contract? What do you, as the writer, want them to do with it? State your purpose at the beginning. — write a clear informative title for the contract. Avoid generic label titles like ‘agreement’ or ‘contract’. Be explicit. Include a statement at the beginning in clear language explaining what the contract or agreement is about.

Structure around your reader’s needs

Put important things first from your reader’s point of view. Give your client an answer, not an essay. Rather than writing ‘point 1, point 2, and point 3, therefore conclusion’, write ‘conclusion because of point 1, point 2, and point 3.

Sound like a person — not an institution

Choose an appropriate tone and degree of formality to suit your reader. Be dignified by being clear and readable rather than sounding ‘lawyerish’. Use ‘you’ and ‘we’, and choose precise but familiar words. Consider using contractions.

Activate your sentences

Write in active-voice sentences: for example, ‘the directors may issue shares’, instead of ‘shares may be issued by the directors’. Active voice leads to shorter, more concise sentences and helps readers connect with the main message.

Choose powerful verbs over abstract nouns. Replace abstract nouns (many of which end in ‘ion’, ‘ment’, and ‘nce’) with the verbs hiding inside.

• there is an expectation =  we expect
• reach an agreement on = agree on
• the governance will be undertaken by x = x will govern

Chop up sentences

A good average sentence length is 15–20 words (or 9–12 online). Chop up long sentences to make your meaning clearer and your reader happier. Keep to one main idea, and don’t load sentences with complex clauses. Try using bulleted lists to break up long text.

Replace ‘legal flavouring’ with plain words

Choose everyday familiar words that show there’s a human behind them.

• accordingly = therefore / so
• expedite = speed up
• forthwith = now
• furthermore = then, also, and
• notwithstanding = despite, still, yet
• whereas = but
• prior to = before
• shall = must

Leave Latin in ancient Rome

Archaic terms and obsolete language belong in the past. Find modern equivalents.

• inter alia = among others
• per se = by itself
• in situ = in position
• viz = namely

Use people’s names

Replace words like ‘employer / employee’, ‘lessor / lessee’, ‘the company’, and ‘the party’ with real names or ‘you’ and ‘your’, ‘we’ and ‘our’.

Don’t kill one bird with three stones

Do away with doublets, triplets, and similar padding. Watch out for repetition like ‘any and all’, ‘give, devise and bequeath’, ‘fit and proper’. Choose one precise word.

Avoid terms of art that keep readers apart

A small number of terms can be useful when writing to another lawyer, but are a barrier when writing for non-lawyers. Either use an easier alternative or explain it.

Use definitions sparingly

A long list of definitions can get in the way of your main message. If your reader’s understanding of a term is different from a specific legal definition, it may be easier to explain it in the text, or avoid using it.

Take a positive approach

Positive statements are easier to understand. For example, instead of: ‘You may not … unless…’, try: ‘You may only … if…’.

Look approachable — avoid a wall of words

White space is not a waste — a document with plenty of white space is more likely to be read and better understood. Add headings, vary paragraph length, use bullets, and add diagrams, tables, charts, and graphics to support text. Choose a plain, simple typeface.

Point the way

Put the most important information at the top and signpost main messages for your reader. Use frequent informative headings, and a clear and consistent numbering system or bullets.

Remember digital is different

Readers have less patience when reading online documents. They expect key words to jump out at them. If they don’t, they give up. Use familiar words, frequent headings full of key words, small chunks of information, actionable content, and informative links.

Put your writing to the test

Read your words out loud, check with non-legal colleagues, ask yourself whether someone in your family would understand it, and ask clients for comments. Use checklists, style guides, and computer software to check for grammar and readability.

From fog to focus

Here’s an example of a mouthful of a ‘force majeure’ clause in the GE contract reduced to a morsel.

Before

Neither Party shall be liable or be in breach of its obligations under this Agreement to the extent performance of such obligations is delayed or prevented, directly or indirectly, by causes beyond its reasonable control, including acts of God, fire, terrorism, war (declared or undeclared), severe weather conditions, earthquakes, epidemics, material shortages, insurrection, any act or omission by any governmental authority, strikes, labor disputes, acts or threats of vandalism or terrorism (including disruption of technology resources), transportation shortages, or Customer’s failure to perform (each an ‘Excusable Delay’).

After

Neither party will be liable for failing to perform any obligation in this contract resulting from circumstances beyond the party’s reasonable control.

Whatever your vision of utopia, a clear focus is a good place to start.

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