Don’t Be Unduly Deferential to Contract Language

Cousin Joshua Stein pointed out to me this post on Above the Law. It’s by Keith Lee, who has his own site, Associate’s Mind.

Keith’s post is about the perils of hasty change:

Put simply, don’t ever take a fence down until you know the reason why it was put up.

Policies and procedures that are in place are likely there for a purpose—another attorney has set it up that way for a reason. The same is true with [a boilerplate contract used by the law firm for a certain type of real estate deal]. More than likely there is something there you don’t see. Something their experience and perspective provides that you can’t perceive. They are not looking at it on an individual basis, but how the process has been handled over the course of dozens of cases. The process is designed to address multiple problems that could occur along the way. What might seem inefficient to you could actually be the appropriate amount of due diligence required to make sure something is done right.

I have no quibble with Keith’s recommendation that any associate at a law firm speak with a more senior lawyer before changing anything in a form contract that the firm has used for a particular kind of transaction. But Keith seems to have greater faith than I in contract language.

Assume that contract provisions “are likely there for a purpose”? Well, I’ve been unable to attribute a meaningful purpose to the “successors and assigns” provision (see this article). From the book The Three and a Half Minute Transaction (mentioned in this post), it appears that no one has been able to attribute a meaningful purpose to the pari passu clause, long a feature of sovereign-debt contracts. And A Manual of Style for Contract Drafting describes all sorts of traditional usages that make no sense.

So of course be careful about making changes to form contracts, particularly if you’re an associate. But beyond that, traditional contract language merits skepticism as much as deference.

Posted in Process | 3 Comments

  • http://www.associatesmind.com/ Keith Lee

    I wasn’t so much advocating for deference to traditional language, in as much as I was advocating for a thorough understanding of a thing before one alters it.

    Many young attorneys raised in a tech culture of newer/better/faster, can have a tendency to sweep away old ways of doing things just for the sake of doing so. Chesteron’s Fence is just a tidy way of pointing out that doing so without understanding is foolhardy. Language, policies, procedures can (and should) be altered and amended if they can be improved, but only if there is a understanding of why they were put there in the first place.

    “Measure twice, cut once,” as the carpenter said.

    • http://www.adamsdrafting.com/ Ken Adams

      You make your point clear in your post, and I acknowledge as much in my post. Where we differ is that you recommend that associates assume that if something appears in a contract, then someone had a good reason to put it there. I long ago stopped making that assumption.

      It’s a modest difference, but not a trivial one. It would be for the best if associates were to learn early on that traditional contract language is dysfunctional.

  • AWrightBurkeMPhil

    When discussing “traditional usages that make no sense,” don’t forget “Sellers have all necessary power and authority to enter into this agreement, to carry out their obligations hereunder and to consummate the transactions contemplated hereunder. This agreement has been duly executed and delivered by Sellers, and this agreement constitutes a legal, valid and binding obligation of Sellers enforceable against Sellers in accordance with its terms.”