Reflections on Australian Contract Drafting

My lightning visit to Australia of course makes me an expert on Australian contract drafting. So here are some general impressions:

“Plain Language”

A significant portion of the Australian legal profession has shifted to what they call “plain language” drafting. I was told, for example, that a while ago Mallesons—now King & Wood Mallesons—invested heavily in training personnel and overhauling templates. (I’m not sure when that took place.)

The result are plain to see, in that Australian big-firm contract drafting is for the most part free of the fatuous glitches that afflict U.S. contract drafting. (U.S. drafters, you might want to bear in mind that U.S. contract language prompts a lot of eye-rolling among Australian practitioners.)

So my Australian seminars were more challenging but ultimately more interesting: less time spent on WITNESSETH meant more time spent on more subtle issues.

But that doesn’t mean that Australian contracts are a picture of perfection. In the rest of this post, I’ll consider areas where perhaps there’s room for improvement.

Categories of Contract Language

Although a tenet of the Australian approach to “plain language” is banishment of shall, treatment of shall varied widely in the handful of big-firm contracts I reviewed. In some it was absent; in others, it was as prevalent as in U.S. contracts; in still others, it appeared only a few times.

The contracts in which it didn’t appear at all provided an object lesson in the notion that getting rid of shall represents a Procrustean solution that addresses a symptom but does nothing to address the broader problem—the fact that drafters aren’t attuned to nuances of verb use. In my seminars, I was able to show how one representative Australian contract in my sample alternated randomly between agrees to, must, and will to express obligations. So getting rid of shall doesn’t guarantee rigorous verbs structures.

And of course, I think you lose something when you throw shall under a bus, as I explain in MSCD and in this article. But broader discussion of use of shall in Australia will have to wait until the third edition of MSCD.

Overtabulation

In this post I suggested that Australian drafters are too quick to tabulate provisions, breaking them up into bite-size morsels separated by white space. I remain of that view.

One result is that the reader has to work harder to string together the pieces. But perhaps another consequence, a more pernicious one, is that the drafter loses the thread a little and tends to meander. I included in my Australian PowerPoint presentation two slides showing a provision that contained five levels of tabulation in a single set of tabulated enumerated clauses. That’s like one matryoshka doll with five others inside, and it’s a sign of out-of-control drafting. I do my best to avoid going beyond level two.

Document-Design Bling

And in this post I said that I found unhelpful, even distracting, the document-design embellishments you see in Australian big-firm contracts. That’s still my view, although I’ll be consulting some document-design experts, to make sure that I’m not in thrall to what I’m used to.

Phony Simplicity Using Defined Terms

I noticed in the contracts I reviewed a tendency to shunt complexity to the definitions. The result is provisions that seem straightforward, until you notice that every other word is a defined term and that the definitions are “stuffed” to the gills with information that goes beyond defining the term. That makes life harder, not easier, for the reader.

Residual Magic-Wordery

I spotted in Australian contracts some residual oddities.

For one thing, every contract I reviewed contained represents and warrants, my old bête noire. Well, you ain’t fully “plain language” if you’re still doing represents and warrants, that’s for sure.

And I wrote in this post about shall procure.

But the real novelty was a bizzaro bit of caselaw that caught my eye on the eve of my trip. Thanks to this analysis by Frazer Moss and Rachel Pie of Clayton Utz, I learned of a Queensland opinion regarding whether a lease that was “executed as a deed” was in fact a deed. The court concluded that it was not a deed, citing a list of relevant factors, one of which was that the lease used as a heading for the recitals “Background” rather than “Recitals.”

From the standpoint of rational use of the English language, it’s a disastrous notion that an ostensibly benign choice could have such nonobvious ramifications. But that’s the price you pay when you’re willing to tolerate the magic-wordery that underlies the whole concept of “executed as a deed”: To allow you to achieve a legal consequence, we’re not going to allow you to have the parties agree to that legal consequence. Instead, we’re going to require that you jump through some olde-worlde, unrelated procedural hoops.

So although the Australian legal profession displays, for example, a reassuring unwillingness to invent different meanings for different endeavours standards, getting rid of the whole notion of “executed as a deed” would move Australia a step closer to plain-language nirvana.

A Final Souvenir of Australia

Below is the last Asia-Pacific snapshot I’ll be inflicting on you. During my Melbourne “Drafting Clearer Contracts” seminar, some members of Melbourne Law School’s faculty were companionable enough to join us for lunch, complete with photo op. The scrawny, ravaged, jacketless guy in the middle is yours truly. The others are, from left, Senior Lecturer Andrew Godwin, my host (horning in on the action, as usual); Professor Cheryl Saunders (Associate Dean, Melbourne Law Masters); Associate Professor Elise Bant (Associate Dean, Melbourne JD), and Professor Ian Ramsay (Director, Centre for Corporate Law and Securities Regulation).

My thanks again to Melbourne Law School for their warm hospitality.