“It Being Understood”

I recommend that you give serious thought to never using it being understood. In the vast majority of instances, it being understood is equivalent to it is agreed. (Indeed, often enough the phrase used is it being understood and agreed.) When used in this sense, it being understood adds nothing, seeing as the contract lead-in states that the parties are agreeing to that which follows. In … [Read more...]

Using Recitals to Tell a Story

I recently reviewed for a company a draft settlement agreement that had been prepared by outside counsel retained by the company. I thought the draft needed help. In particular, I found the recitals bloated and vague: RECITALS A. As of the date of this Settlement Agreement a dispute exists between AcmeTek and Widgetz regarding the contracts made between them. AcmeTek was chosen by Widgetz in … [Read more...]

Using “Parties” as a Defined Term

Regarding use of the word parties as a defined term, MSCD 2.42 says the following: [D]o not use the defined term the Parties. It ostensibly spares the drafter from having to refer throughout a contract to the parties to this agreement, but one can simply refer to the parties, because such a reference could not conceivably be construed to mean the parties to some other agreement. After MSCD … [Read more...]

Adams to Speak at the ABA Annual Meeting

At the ABA Section of Business Law annual meeting, which this year is being held in San Francisco, I'll be on the panel for a program entitled "How to Write Better Business Documents." It's being sponsored by Business Law Today and will be held on Friday, August 10th, from 2:30PM to 4:30PM. I'll be speaking about—guess what?—contracts. It should be a lot of fun, given that the other panel … [Read more...]

Costly Drafting Errors, Part 2—Cussler Versus Crusader Entertainment

In litigation between author Clive Cussler and Crusader Entertainment over production of the movie (and box-office flop) “Sahara,” a jury recently ordered Cussler to pay Crusader $5 million in damages. News accounts (including this one) noted that the jury foreman had said that the contract between the two sides played a big part in the deliberations. The foreman found the contract hard to … [Read more...]

Reflections on a Year of Blogging

I posted my first blog item a year ago yesterday, so I thought that a bit of navel contemplation was in order. In this item on the theme of "Niche Thyself," Kevin O'Keefe of Real Lawyers Have Blogs recently quoted with approval the notion that an entrepreneur aims to create something that is of high value to customers and is offered by few others. That's hardly a novel proposition, but it can … [Read more...]

Some Terminology Relating to Representations

Don't worry—I'm not going to get on my representations and warranties hobby-horse again. Instead, I just want to point out some terms that are inappropriately used in relation to representations. As I say in MSCD 3.113, one breaches an obligation, but not a representation. Instead, a representation, like any statement of fact, is either accurate or inaccurate. If I tell you that it's Monday … [Read more...]

Translating Contracts

I've recently been thumbing through Translating Law, by Deborah Cao, associate professor at the School of Language and Linguistics, Griffith University, Queensland, Australia. It appears to be a useful resource for those who find themselves translating legal documents. I would have thought that they need all the help they can get. In particular, I don't envy anyone called on to translate … [Read more...]

The Word “Indenture”

The word "indenture" is something of an oddity. Here's how Black's Law Dictionary defines it: A formal written instrument made by two or more parties with different interests, traditionally having the edges serrated, or indented, in a zigzag fashion to reduce the possibility of forgery and to distinguish it from a deed poll. Obviously we no longer produce contracts with serrated edges. … [Read more...]

Should You Retain Drafts of Contracts?

Each law firm where I worked doubtless had a written records-retention policy, but I was blissfully unaware of it. Instead, I and at least some of my colleagues did whatever we thought appropriate. In that regard, the one question that seemed to crop up quite often was whether after a deal closes one should retain in the files for that deal any drafts of the signed contracts. Some partners were … [Read more...]

Illinois Case Provides Great Example of Syntactic Ambiguity

A recent Illinois case, Regency Commercial Assocs., LLC v. Lopax, Inc., 2007 Ill. App. LEXIS 476 (Ill. App. Ct. May 4, 2007), provides a great example of how syntactic ambiguity can really make a mess of a contractual relationship. (Click here for a copy of this case.) The predecessor of the plaintiff Regency sold to the defendant Lopax land to be used for a Kentucky Fried Chicken restaurant. … [Read more...]

Contract Lifecycle Management—Q&A with Ashif Mawji, President of Upside Software Inc.

For this first post in an occasional series about contract lifecycle management (for more background, see this introductory post), Ashif Mawji, president of Upside Software Inc., was kind enough to take the time to speak with me. Q: Ashif, your contract lifecycle management (CLM) product is UpsideContract, which is now in Version 5. In a nutshell, what does it aim to do? A: UpsideContract … [Read more...]

Contract Lifecycle Management—Some Preliminary Thoughts

My interest in contract language is largely a function of my interest in process. In particular, readers of this blog will be familiar with my interest in document assembly. An industry has built up around helping companies manage all aspects of the contract process; the discipline is referred to as "contract lifecycle management," or CLM. (As a business catchphrase, it's less objectionable … [Read more...]

Avoiding Arguments Over Whether Singular Also Means Plural

Today's case from the drafting hall of shame is a case recently decided by the Nebraska Supreme Court, Coral Production Corp. v. Central Resources, Inc., 273 Neb. 379 (Neb. 2007). This case arose out of a dispute between owners of fractional working interests in oil and gas assets. When Central put its oil and gas assets up for sale, Coral claimed that under the joint operating agreement … [Read more...]

Adams Does “ABA Book Briefs” Podcast

The latest addition to the American Bar Association's series of "ABA Book Briefs" podcasts is an interview with yours truly. In it, I talk for ten minutes about MSCD and some current issues in contract drafting. Click here to listen to it. Regular readers of this blog will find that the podcast doesn't contain any earth-shattering secrets. But it does offer proof that behind this website is a … [Read more...]

Who Owns the Copyright, Outside Counsel or the Client?

Last year the New York Law Journal published my article "Copyright and the Contract Drafter." I'd now like to revisit who owns copyright in a contract, outside counsel or the client. To set the scene, here's an extract of my article: A client asks its law firm to draft a form of agreement for a new kind of transaction. The client ends up paying the law firm plenty for their work, and the … [Read more...]

Sixth Circuit Case on Meaning of “Foreclosure”—A Case Study in Lexical Ambiguity (or Vagueness)

In Provident Bank v. Tenn. Farmers Mut. Ins. Co., 2007 U.S. App. LEXIS 10671 (6th Cir. May 2, 2007), the Court of Appeals for the Sixth Circuit considered the meaning of the word "foreclosure." (Click here for a copy of this case.) Owners of a home in Tennessee obtained a mortgage on their home from plaintiff bank and insured the house with defendant insurance company against, among other … [Read more...]

EchoSign—A Signature Automation Solution

IACCM's email updates are a reliable source of interesting leads, and the April update was no exception, in that it mentioned EchoSign, a company that offers a "signature automation solution" of the same name. Here's how EchoSign (the product) works: You email a contract for signature through EchoSign. EchoSign automatically adds a machine-readable fax cover sheet bearing an EchoSign fax number … [Read more...]

When Implementing Modern Contract Language, Pick Your Battles Carefully

A few days ago, in a comment to my post on justified text, reader j-lon had, in part, this to say: Actually, a lot of stuff in your book is [a tough sell to people sometimes]. Much of it makes sense to me, and I agree with it. But I also spent a number of years teaching legal writing, so I kind of already had an interest in these sorts of issues. A lot of other folks don’t, and it’s a … [Read more...]

“Software” Page Restored

Late last year I created the "Software" page of this site to describe how the Numbering Assistant—a popular paragraph-numbering utility offered by Payne Consulting Group—has added to its preloaded enumeration schemes the “articles” and “no articles” versions of the enumeration scheme recommended in MSCD. The Numbering Assistant offers, at a nominal price, a painless way for any drafter, and any … [Read more...]