I noticed that John Gillies’s review of the fourth edition of A Manual of Style for Contract Drafting (here) attracted a few comments, including this one by Angela Swan, counsel at the Toronto law firm Aird & Berlis and adjunct professor at Osgoode Hall Law School, York University:
Adams is dead wrong in his views on the various “efforts” clauses one finds in contracts. Canadian courts do draw careful distinctions between the various kinds of efforts that may be required, except perhaps with the horribly ambiguous, “reasonable best efforts”.
I’ve been fortunate to have readers point out when I’ve been wrong. Show me I’m wrong and you’ve made a friend. But that’s very different from this sort of drive-by shooting.
To demonstrate that my analysis of efforts provisions is mistaken, Angela should have started by reading closely the 20 pages on the subject in the fourth edition of MSCD. Then she should have detailed exactly how I’m mistaken. Instead, she was content with simply observing that I’m dead wrong.
It’s in fact Angela who is dead wrong, doubly so. First, as regards the implications of Canadian caselaw, she’s completely mistaken, as I explain in detail in MSCD. (If you don’t have access to MSCD, go here for my brief 2014 article on the subject in the Canadian periodical The Lawyers Weekly and go here for my recent article on endeavours provisions under English law.) And second, she expects everyone to take her word for it, without offering any analysis. That’s not how the marketplace of ideas works.
I already have a sense of the basis for Angela’s objection. In the course of figuring out who Angela is, I realized that she and another Toronto lawyer gave in 2014 a presentation in which they discussed efforts provisions. Afterward, Angela’s co-presenter described me to one of my readers as a U.S. blogger who should pay more attention to Canadian case law on efforts, specifically Atmospheric Diving Systems. That happens to be the most illogical court opinion I have ever encountered, to the point of farce. Discussing it in my seminars is always good for a laugh.
How could Angela have gotten this so wrong? I see two main reasons. First, it appears that her subject is contract law. (Go here for a list of her publications.) That’s why, as far as I’m concerned, she’s a marginal figure in the conversation on clear and modern contract usages: where contract law ends is where the real work of the contract drafter begins.
And second, Angela evidently endorses the misguided notion of “tested” contract language: at least with respect to efforts provisions, she’s in favor of using in contracts whatever verbiage courts happen to have considered, no matter how confusing, and attributing to that verbiage whatever interpretation courts have given it, no matter how nonsensical. (Regarding the notion of “tested” contract language, see this post from earlier this week.)
Those with a litigation mindset are particularly partial to the notion of “tested” contract language: they’re prone to constantly refighting old battles. It’s telling that Angela’s book Canadian Contract Law (with Jakub Adamski) is described by the publisher as a “civil litigation book.”
Two other factors might have contributed to Angela’s comment. The first is cognitive dissonance. Here’s what I said in this 2013 post about some strident resistance I had encountered:
I suggest that it’s a product of the cognitive dissonance that arises when someone who is steeped in the dysfunction of traditional contract drafting encounters something that challenges the traditional order. Because the traditional order and my views can’t coexist, something has to give. If the alternative is to overhaul your approach to contract language, some might find it simpler to reject outright what I have to say, with at best only a flimsy pretext.
And second, Angela might simply not have been paying attention: her most recent article is from 2008.
I will now put Angela Swan out of my mind and go about my business. Why didn’t I simply ignore her comment? Here’s what I said about that in this post from earlier this year, about another instance of efforts misinformation:
The legal industry is a big, complicated business with a lot at stake for lawyers and their clients. I and many others like me try to do our bit to reduce the confusion. Perhaps that’s out of fashion in “post-truth” America, but I’ll remain on the job. If you spout misinformation in the marketplace of ideas, you’re just making things more difficult for the rest of us, and I’ll take the liberty of rapping you on the knuckles with my truncheon.
Oh, and what was the advice that Angela objected to? That you use only reasonable efforts and strike all other efforts standards from your lexicon. But that’s just part of the story; see MSCD for the rest.
Here’s a CVS and Aetna merger agreement that’s been in the news lately.
https://www.sec.gov/Archives/edgar/data/1122304/000095010317012202/dp83737_ex0201.htm
They seem to consciously use “reasonable best efforts” and “commercially reasonable efforts” to specify different standards. When I was practicing in biglaw, I was taught that “commercially reasonable effort” expected you to spend some reasonable amount of money given the context, whereas that expectation is less without the word “commercial.” Just out of curiosity, what would be your ballpark estimate of things that are ‘wrong’ (per Adam’s drafting principles) with this merger agreement?
Hi. It’s commonplace to find multiple efforts standards in one contract. Usually it’s the result of sloppy copy-and-pasting. And unfortunately, what one learns in BigLaw often doesn’t make sense. Regarding what’s wrong with the average BigLaw M&A contracts, see the following post: https://www.adamsdrafting.com/an-open-letter-to-jeff-bezos-about-the-washington-post-contract/.
I wouldn’t underestimate these guys and dismiss their ‘inconsistency’ simply as being sloppy; it is more likely that it was intentional. Plus, if anything goes awry, their skin is in the game, both in terms of reputation and malpractice wise. You aren’t burdened by similar constraints. I would reckon there are hundreds of violations of Adams’ drafting principles in pretty much all of material contracts that are entered into today. If practitioners followed your advice and you ended up being proven wrong in the court, you can laugh it off, but they cannot. If you want your standards to take root in the market place, you draft the contract with real clients with real money on the line, put your name on the legal opinion, and provide financial backing and stand by that document. If it is worthy and passes scrutiny from the profession, some will use it as precedent.
https://www.goodreads.com/quotes/7-it-is-not-the-critic-who-counts-not-the-man
I suspect you’re new to what I do. Over the past 15 years I’ve responded constantly to this sort of objection. It doesn’t make sense. Perhaps the best place for you to start would be the introduction to the fourth edition of MSCD4. See the link on the MSCD page.
Actually I bought your 2nd Edition when I was a junior guy. But fighting for these drafting points, you have to spend your negotiation leverage, and they are best saved for material substantive points. They are red herring in practice. Plus, arguing about them increases issues, rather than decreasing them. And on signing or closing date, the number of outstanding issues must be zero. When you have business issues at hand, these points become pedantic.
Generalizing isn’t useful: it all depends on context. Sure, if you’re the junior person on an M&A deal, it’s not your place to unilaterally change stuff. But you’re nevertheless better off knowing what works and what doesn’t work, and you can make important fixes, with partner approval.
And in other contexts, there’s more scope for rational contract language.
J.L.:
In fairness to Ken, he frequently distinguishes between what you ought to do for your own form contracts (where spending bargaining leverage is not an issue) and what you ought to do in negotiations (where it is). I’d say he’s a realist on that point. But being a realist in the context of a negotiation doesn’t excuse proposing a bad form.
Chris
When I look back, I think there were several times when your position lost your credibility. Your disregard for judges’ opinions is one; also simply dismissing what’s common knowledge among biglaw professionals (“What they teach you don’t make sense”). One specific instance, I recall, is your insistence of using “Party x states” vs. “Party x represents and warrants”. (Nobody says ‘states’, ever, in any real contract.) Yet, “perfection” is an OK use of legalese; drawing the line of what is acceptable vs. not I found to be completely arbitrary. I think you have to be open to the possibility that you might be the one who’s not making sense. At this stage, I think the market has spoken based on the lack of adoption in any material agreements after 15 years of effort… To be fair, I appreciated your academic and intellectual discussions; just became unpalatable when your position became “I am right and the rest of the world is an idiot” e.g. Angela
Your sensibilities aren’t my concern: my only task is what makes sense. And as Chris notes, I’m a realist.
As regards Angela, I was responding too a silly attack. In that context, I permit myself to tell it like it is.
Sure, you are king of your blog. I didn’t think Angela was attacking, but in any case, I think the past 15 years, you have made your point, and I think the market has had time to digest it. Ultimately, the lack of adoption I believe is due to the rejection of the ideas, rather than the market being unaware of your ideas. And as such, I agree with your decision to mute the battlecry of contract drafting revolution. Pertinent points had been memorialized in the MSCD and I thank you for your contribution to the craft and the profession.
I’m wasting my breath here, but I don’t know what you mean by “lack of adoption.” My book was first published 16 years ago; that’s a blink of an eye. It’s been a phenomenal legal-publishing success. And every year I do more seminars around the world, including in-house seminars for global companies.
But the main point is that following my guidelines doesn’t require popular vote. The only people you need to convince are people on your side of the table and the other side of the table.
Lack of adoption in real life contracts that embody material business transactions. For example CVS/Aetna M&A agreement mentioned above. Or a recently entered into PayPal credit agreement.
https://www.sec.gov/Archives/edgar/data/1633917/000119312517362257/d505202dex101.htm
I could download 1000 material agreements from EDGAR, and none would heed any advice to Adams’ drafting principles. Where can I find one example of a contract that deals with real issues that follows Adams’ drafting principles?
OK, that’s enough, now bugger off. I wish you a glorious future as a copy-and-paste monkey. My readers and I prefer to be informed consumers of contract language, making whatever concessions that
circumstances require.
I’m sorry for irritating you. But I’m not sure if anyone’s ever been real with you and given you honest feedback, that you may be on an island. I think the dots are there for you to connect. I think you have put in tremendous amount of effort in your 4 editions of the style guide. However, at some point, we have to look at the results and whether it has accomplished what it set out to do. If we cannot locate a single instance of an executed contract in this world that you think is a worthy example that embodies your work, then you have to ask yourself some hard questions. I wonder if the endeavor was destined to fail, or whether choices and decisions made along the way made it lose believers along the way.
I have a bunch of contracts that embody Adams’ drafting principles :)
Keep doing what you’re doing, Ken. There are a lot of us out here who appreciate it!
Ditto. Like all my form contracts, which come back without changes 85% of the time we propose them, largely because seasoned business people don;t need a lawyer to tell them what they mean.
I suspect Ken may be having more success with in-house counsel — who draft the vast majority of actual agreements by count — than with BigLaw — whose agreements show up in EDGAR. No way to prove it, so I could be deluding myself. It wouldn’t be the first time.
Hear hear. The cut and pasted uses obsolete and vestigial language b cause he is BILLING by the six minute increment.
FYI, https://www.adamsdrafting.com/has-a-manual-of-style-for-contract-drafting-failed/. Since you had your say in this post, I’d be grateful if you’d not comment on the new post, or at least wait until others have had their say and keep it brief.
No worries
By the way, it was rather, um, interesting fielding your comments and responding to them during breaks in yesterday’s seminar in San Francisco. Ultimately, it provided an opportunity for reflection, so thanks for playing.
Every hero needs a villain
I’m just one corp-commercial solicitor at a medium-sized firm, but I try to adhere to MSCD in all of the contracts I draft, have little friction from other lawyers who review my contracts, and have had a number of clients express their pleasant surprise at being able to understand what they’re reading. Few of those contracts have resulted in litigation, and those that have had not had at issue interpretation of any clause that created ambiguity.
In reviewing other lawyers’ contracts, I try not to nitpick the finer points of MSCD, only recommending MSCD-compliant language where I can explain a reasonable risk of ambiguity/contradiction/error in the existing language. This approach seems to yield few objections.
From the perspective of those who work in-house, please continue evolving MSCD and its principles as a means of expressing contract terms precisely and consistently rather than as legalese.
A few observations:
1/ If MSCD raises, say, two drafting issues a page and recommends a resolution, that’s a thousand issues considered and massaged, a huge service in itself, even if one disagrees with every recommendation in the book.
2/ What percentage of MSCD’s recommendations are good? Everyone can have her own answer, but (a) the American Bar Association publishes the book; (b) the book sells; (c) Ken is invited to teach at law schools; (c) Ken is asked to lecture all over the world.
3/ If the manure lagoon of EDGAR gives MSCD a thumbs down, whom does that discredit?
4/ The test of any recommendation is whether if makes sense, not who accepts it.
5/ Ken criticizes ‘represents and warrants’ on the ground that, for reasons he lays out meticulously, it doesn’t make clear what consequences flow from falsity of the stated fact, consequences good drafting would make clear. That BigLaw keeps using ‘represents and warrants’ anyway isn’t a rebuttal.
6/ If Ken’s all wet, and following his advice courts business losses and malpractice claims, where’s ‘A Manual of Traditional Contract Drafting Style’?
7/ Everybody’s entitled to disagree with Ken’s take on anything. For example, I love court contract interpretation decisions because if a court looks at usage A which could mean either B or C, and decides A means B, not C, it tells me ‘Don’t use A when you mean B; consider using B’. A court’s blessing on a usage doesn’t mean it makes sense, but neither is a usage automatically suspect because a court blesses it.
8/ But wholesale dismissal of MSCD amounts to rejecting the life of the mind. That’s no fun.
Regarding your point 7, where’s the disagreement?
Say I’m wrong, and you have not repeatedly claimed to attach little value to court interpretations of contract language for various reasons, such as lack of semantic acuity on the part of many judges. It would be easy to substitute some other point on which you surely think I’m wrong, such as my contention that language of discretion is a subset of language of performance.
My point is that one can *argue* about one or more of your analyses or recommendations, but saying in effect that ‘EDGAR still doesn’t resemble MSCD, so ignore MSCD’ isn’t *arguing* at all, or more precisely, it’s arguing from authority, where the ‘authorities’ appealed to are (a) tradition, (b) what BigLaw does, and (c) EDGAR.
Actually, what I say is that I don’t need courts to tell me how I should draft. Instead, I use court opinions as cautionary tales, in that they tell me what formulations are confusing. And sure, if one or more courts attribute a particular meaning to a given formulation, I have to take that into account.
This is my problem, because Ken doesn’t give a hoot about the courts. A contract is a private law between the parties. If one doesn’t comply, you go to the government (courts) and complain. How the court interprets that ‘confusing’ language is now made clear, by virtue of their decision. Ken’s view is that since it caused the controversy, we stay away, which is helpful to his vision, because he wants to rewrite everything. Practitioner’s view is that, actually the court did what we thought they would do, so this reinforced this, so let’s keep on using it. Of course, if court acts differently than anticipated, then yes, you move away from that language and draft something completely new. Whether you stick to ‘confusing’ language depends on what the court does with it. Either way, you pay attention to what they say and do, which is an important element of ‘traditional contract drafting style’.
Your notion of courts lending clarity to all is naive. Because circumstances vary from case to case, and because judges have different levels of semantic acuity, different courts say different things about the same contract language.
And i can do without your mischaracterizing my position right after made a point of clarifying it.
Please stop commenting on this post.
Sorry but just one point – that’s why choosing the right venue is important in a contract. Delaware for M&A, New York for securities/debt. Both of those places have very good judges; vey smart and would rank very high on ‘semantic acuity’.
1. Raising an issue on relatively trivial drafting point is frowned upon, or reveals the inexperience or poor judgment of the attorney, when there are 50+ business points and other real issues that need to be resolved, issues which if you don’t resolve end up costing real money for your client. The issue is that when you change any wording, it often favors one side or another, even if the intention is more clarity, because there are times when one party might want more flexibility; and obviously you shouldn’t raise changes that are adverse to your client, and if you cherry pick the changes that are favorable to your client only, that’s obviously going to be met with resistance.
2. I think MSCD has some good parts. Not sure about the percentage – but bombs like “states” vs. “represents and warrants” does detract from its persuasiveness. A change like that creates an issue where there was none. But mostly MSCD’s stuff is not material, not worthwhile negotiation effort, and although it might have some academic value, very little practical value for sophisticated transactions. You won’t be freeing yourself of any major risk by adopting MSCD, but some of those errant recommendations, if you adopt, can and will hurt you.
3. Most people who simply criticize EDGAR don’t appreciate how many programs or users depend on it staying the same. Yes, the government can upgrade it, but it will break a lot of things in the process. It must use old technology because stability is more important when a lot is at stake, especially if you can’t take it off-line for a while. Anyway, EDGAR is just a repository of material documents for public companies, so I would rephrase your question to: If public companies and their lawyers give MSCD a thumbs down…
4. Bad recommendations get rejected. So whether people accept or not is relevant.
5. The rebuttal is that Ken Adams just made up the alternative, “states”. I would say that a lawyer changing instances of “represents and warrants” into “states” is literally out of his mind, regarding a blogger’s de novo thought higher than that of courts and the collective wisdom of the profession. Most lawyers with 10+ years of experience would view that as poor judgement.
6. Well, traditional contract drafting style can be discerned if you’ve been exposed to it for a while; there doesn’t need to be a manual for it to prove its existence. It is what Ken is trying to fight, after all. In any case, you misread my point, which is that Ken’s a critic, who doesn’t have to pay the consequences of his words. Talk is cheap. Ken doesn’t get sued if he’s wrong. If he did, he might be bankrupt by now.
7. Yes, so I am disagreeing with Ken. For whatever its worth, I much prefer a more respectful view of the traditional language, something like “Working with Contracts” by Charles Fox. Not as extensive as MSCD, but the explanations contained there is what I recommend to juniors, rather than Ken’s.
8. Just as SEC’s Plain English Rule doesn’t apply to trust indentures (i.e. contracts), I think that MSCD has limited applicability, especially for the more complex and nuanced agreements. I think it can probably be used safely for relatively immaterial agreements, like nanny contracts and pest removal agreements, but Ken doesn’t limit it to consumer contracts; he also wants to impact and influence contracts that sophisticated parties (where both parties are represented by counsel) enter into.
In the real world, everyone wants to spend time on material points, not immaterial points. Whether an M&A agreement has an earn-out or not is a big material issue to be labored on, and negotiated for. The drafting points, while it can sometimes be relevant, pales in comparison. But the general sentiment is that, if it is not broken, don’t fix it – especially if the ‘solution’ is inserting completely untested Ken Adam’s language, which came from his imagination, which might actually be creating problems down the road. Plus, Ken doesn’t limit it to just one part, he wants to rewrite everything. Forget it.
Part of Ken’s advantage and weakness is that he is not burdened with substantive knowledge of any specific field. So he labors on the drafting points, as that’s his specialty. But in the hierarchy of priority in the real world, drafting points rank relatively low on people’s minds and by the time real business points are resolved, there’s deal fatigue and unless there’s clear and imminent danger of some language exploding in our face, you’d be hard pressed to find a lawyer who wants to rewrite the entire contract based on MSCD.
What if your client wants the other side to a deal to really, truly make “best efforts” to do something, falling in line with the court’s interpretation of the phrase? How negligent would you be to not use the phrase, and substitute it with “reasonable efforts”, because you think using “best efforts” is “illogical”?
Hi Shawn. The distinction you allude to doesn’t make sense and is unworkable. For more details, see my 2019 law review article, at https://www.adamsdrafting.com/wp-content/uploads/2019/07/TBL-74-3-005-Adams.pdf.