Language Contracts On The Rise

George Orwell, the author of the classic novel 1984, was also famous for insisting on clear and concise writing. His “writing rules” set a standard that contract writers would do well to heed.

For example, one of his precepts is, “Never use a long word where a short one will do.” Another is, “Never use a foreign phrase, a scientific word, or a jargon word if you can think of an everyday English equivalent.” Finally, giving cover to editors everywhere, “If it is possible to cut a word out, always cut it out.”

While it’s not apparent that contract attorneys and negotiators have taken Orwell’s rules entirely to heart, there is hope that plain and accessible contract language is the next trending thing.

Business Friendly Contracts Professors Helena Haapio and Thomas D. Barton are two notables behind the movement, educating organizations on how to create “business friendly” contracts, without giving up safety or security. Haapio (Assistant Professor of Business Law, University of Vaasa; International Contract Counsel, Lexpert Ltd.,) and Barton (Louis and Hermione Brown Professor of Law, California Western School of Law) argue that contracts should ensure that an agreement is legally enforceable, but contract writers should use language that is comprehensible to everyone involved in forming and implementing the exchange. A chapter by Haapio and Barton in the recently published Liquid Legal: Transforming Legal into a Business Savvy, Information Enabled and Performance Driven Industry highlights the need to use contracts as business tools rather than legalese-ridden documents, as business enablers rather than as obstacles. They write: “By changing the design of contracts and the ways in which those contracts are communicated—through simplification and visualization, for example—legal and business operations can be better integrated. Contracts can then be more useful to business, and contract provisions can actually become more secure by becoming easier to negotiate and implement.”

Haapio and Barton emphasize the value-enhancing possibilities of contracting relationships that are collaborative rather than adversarial and show how simplification and visualization can make creating “business friendly” contracts a reality.

Plain Language Contracts In a recent Harvard Business Review article, Shawn Burton, general  counsel of GE Aviation’s Business & General Aviation and Integrated Systems businesses, makes a strong plea to use clear and plain language in contracts. “For the most part, the contracts used in business are long, poorly structured, and full of unnecessary and incomprehensible language,” Burton writes. “Are pages of definitions; words like ‘heretofore,’ ‘indemnification,’ ‘warrant,’ and ‘force majeure’; and phrases like ‘notwithstanding anything to the contrary herein,’ ‘subject to the foregoing,’ and ‘including but in no way limited to’ necessary for an agreement to be enforceable?” The answer is that even for complex business contracting issues the basic language need not be obscure, opaque and unreadable. Burton says there is no value to “useless” boilerplate language, endless strings of synonyms, sentences that go on for page after page and outdated grammar.

He writes: “A contract should not take countless hours to negotiate. Business leaders should not have to call an attorney to interpret an agreement that they are expected to administer. We should live in a world where contracts are written in accessible language—where potential business partners can sit down over a short lunch without their lawyers and read, truly understand, and feel comfortable signing a contract. A world where disputes caused by ambiguity disappear.”

The good news is that it is doable. In the HBR article, Burton describes a three-plus-year effort to promote plain-language contracts at GE Aviation’s digital-services business. Since the initiative began in 2014, the unit has signed more than 100 plain-language contracts. “Those agreements took a whopping 60% less time to negotiate than their previous legalese-laden versions did,” Burton said. He reported that customer feedback is “universally positive, and there hasn’t been a single customer dispute over the wording of a plain-language contract.” Note that he’s not talking about “simplified” agreements with fewer words, better headings, and cleaner fonts. “I’m talking about a contract that a high schooler could understand with zero context or explanation.” Comic Contracts Then there are Comic Contracts that are no joke. Comic contracts are documents that are:

• Legally binding contracts in which parties are represented by characters
• The agreement is captured in pictures
• The parties sign the comic itself asthe contract

Robert de Rooy, an attorney based in South Africa and the founder of Comic Contracts, says, “We produce illustrated contracts for people who are illiterate, people who are not literate in the language of the contract, employers with multi-cultural workplaces or companies that wish to transact with people who suffer from reading or intellectual disabilities. We want to enable people to be able to independently understand the contracts they are expected to sign.” Those who are fans of contracts that have transparency, visibility, simplicity and clarity should take note. The goal behind business-friendly, plain-language, and comic contracts is to make them understandable, accessible and transparent for the people directly affected by them—not to keep lawyers in business. Somewhere, Orwell is smiling.