In the previous post, we discussed why a contract writer should follow certain rules (i.e. Contract Drafting Rules) amid drafting a commercial agreement. Also, we briefly discussed first 2 rules from the total 6 as mentioned below;
- Use appropriate language
- Avoid Contradiction
- Avoid Duplication
- Use Reference and Cross-references
- Write mutually explanatory & complementary clauses
- Maintain Uniformity and consistency
In this post, we will cover balance 4 rules (3, 4, 5 & 6) with brief explanation;
6 Contract Drafting Rules (Part 2)
3) Avoid Duplication
Duplication means repetition of certain provisions in the Contract again and again. It could be either in the same document or across different documents.
Duplication is a serious and commonly observed problem. One could easily find few provisions getting repeated at many places in the Contract with slight changes in the wording
As a general practice, contract department prepare a DRAFT Contract. The DRAFT is then reviewed by cross functional team. So, each reviewer start modifying certain clauses pertaining to his domain. He/she generally does NOT look at other part of the contract. Accordingly, he fails to notice that the clauses added by him already exists in other part the contract
The above result in repetition of certain provisions in a particular document or across contract documents. Consequently, this duplication with slight change of wording may invite contractual disputes. Hence the contract writer to ensure that there is no/minimum repartition of any provision in any contract document. Similarly, no duplication of same intent/liability across various documents, which are part of the contract
4) Use References and Cross-references:
We know that a contract is not a collection of independent statements. Actually it is accumulation of various interdependent clauses which are linked to each other. The real test of contract writer is how well it can link various clauses thereby avoiding duplication and contradiction. This is achieved by using references and cross-references rather that repeating a provision each time (or starting afresh)
5) Write mutually explanatory & complementary clauses:
Each contract clause is drafted with specific purpose & intent. Also, each document, forming part of contract, covers the set of promises and counter-promises of particular nature or type. Therefore, an individual clause/document may not cover all aspects of the transaction or requirements.
For examples, Conditions of Contract covers mainly the commercial and legal aspects of the transaction. Technical specification more specifically mentions the technical attributes or operational requirements of the product or service. A drawing gives blue print of finally delivered product or projects or a facility.
Hence, it is necessary that various clauses and different documents should further explain each other and fill the gaps between them. The ultimate goal is to write a contract where various clauses and different documents explains/complement each other. This will ensure that all documents put-together represent a complete agreement between parties
6) Maintain Uniformity and consistency
This is one of the golden rules among all contract drafting rules.
As per this rule, let us first define the key terms then use the same words and phrases uniformly throughout the contract. This will bring convenience in better knowing the intent. Also, this will avoid un-necessary confusion or misunderstanding. The confusion normally arises because a party may draw a different meaning because of use of another term/word
Moreover, since the team forming a contract and administrating it are generally not same, the use of same words and phrases ensure quick understanding and smooth execution of contract. Further, in the event of dispute, it is easy for the third party to quickly understand the context with the se of same words & phrases throughout the contract
For example:
- if we use the term Program to define project schedule, then, please use this term everywhere throughout the contract. Please avoid using other terms such as Schedule, Completion Schedule or Execution Schedule even through these terms have same meaning.
- Similarly, if we use the terms Employer to define the owner of the facility, then, please do not use other terms such as Owner or Purchaser
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