Tough Times a Spur to Clearer Drafting?

This from the Lex column in today's Financial Times, regarding Bear Stearns and the Cerberus litigation: It is too simplistic to blame sloppy drafting for disputes. Still, there may be room for improvement in terms of updating the often-archaic language used in merger agreements, as firms such as Jones Day and contract specialist Kenneth Adams have called for. This would help in ensuring deal … [Read more...]

Proofreading, Anyone?

Input from readers of this blog has already served to enhance the second edition of A Manual of Style for Contract Drafting. But why stop there? I've just sent the ABA the manuscript for MSCD2. I enjoyed putting it together, as it contains a boatload of new material. What it needs now is proofreading, and that requires fresh sets of eyes. How about yours, dear reader? All I'm looking for is … [Read more...]

When a Party Has a Limited Role in a Transaction

Special thanks to reader Tony for reminding me of a usage that had slipped my mind: becoming party to a contract with respect to only certain provisions. For example, in an acquisition, the buyer’s parent might be party to the acquisition agreement solely to guarantee the buyer’s obligations or solely to undertake to pay a termination fee in certain circumstances. It’s appropriate to reflect … [Read more...]

Drafting Errors in the Bear Stearns Merger Agreement? What a Shock!

[Update March 24, 5:30PM EDT: Some people are suggesting that there's something fishy to the story of Wachtell's "mistakes." See, for example, this post at Dealbreaker, and this one on the Conglomerate Blog. On the other hand, Steven Davidoff's analysis, at DealBook, takes the story at face value. I'll let others who are closer to the deal figure out the story. And in any event, the parties have … [Read more...]

The Bear Stearns Merger Agreement—It’s Not a Thing of Beauty

I'm grateful to stalwart readers Steven Sholk and Mike Wokasch for contacting me about the Bear Stearns merger agreement. (Click here to go to a PDF copy.) This deal raises all sorts of policy issues, but we at AdamsDrafting say to heck with the big picture—let's look at the drafting angle! I offer below some random impressions derived from ten minutes spent skimming through the … [Read more...]

English as the Lingua Franca of Contracts

I'm working on the introduction to MSCD2, and five minutes ago I wrote this: English is used in contracts around the world, and not only in contracts between companies from English-speaking countries. English has become the lingua franca of international business, so a contract between, say, a French company and a Brazilian company is more likely to be in English than in French or … [Read more...]

Stating Amounts of Money

I can think of five issues relating to how you state amounts of money in a contract. Words and Numerals Drafters will often do the words-and-numerals thing when stating amounts of money: Acme shall pay Widgetco One Million Dollars ($1,000,000). The idea is that whereas numerals are easier to read than words, they're more prone to typographic errors; adding words provides a safety net, as … [Read more...]

The Importance of Issue Spotting

Most of what I do addresses how to express clearly and efficiently whatever you want to express in a contract. But that only goes so far, because no amount of clarity will help you if you simply mishandle an important substantive issue. This story in the ABA provides a reminder of that. A Texas law firm retained an Arizona law firm to help it pursue an environmental class action. In the … [Read more...]

The Current MAC Environment

I've written at inordinate length about how MAC provisions are used in contracts and how MAC is defined. But I don't much get into whether, and how, MAC provisions are actually invoked in deals, unless issues of contract language come into play. For a useful discussion of such policy issues, see this DealBook story by Steven Davidoff. … [Read more...]

Sources of Uncertainty in Contract Language

[I was prompted to write this post after consulting, over the past few months, dozens of cases ostensibly involving ambiguity but in fact dealing with a range of other problems. I plan on including a version of this in MSCD2, so I'd be pleased to receive comments.] Uncertainty in contract language arises principally from six sources—ambiguity, undue generality, inconsistency, redundancy, … [Read more...]