A Proponent of “Tested” Contract Language

Today, thanks to a tweet by @360venturelaw, I stumbled upon a blog post entitled “Famous Last Words: ‘The Shorter the Better.'” It’s by Mike Stanczyk, a corporate attorney based in Syracuse, New York.

It’s a sensible post, but Mike wraps it up with the following point:

In closing I will say that when possible I prefer and do use “plain English” agreements. However, its not always possible. It is beneficial to use documents that you know courts have passed judgments on before. So when they see yours you can be relatively sure what will happen. Precedential value of various types of agreements outweighs readability and considerations regarding length.

That caught my eye because it offers something I don’t see very often, a succinct rationale for relying on “tested” contract language. For someone else’s version of the same explanation, see MSCD 1.31 (it’s also in this 2012 post).

The idea is that it’s safest to use contract language that courts have had occasion to interpret. That way, you’re sure what your contracts mean. But that’s a pernicious notion, in that it condemns you to recycling dysfunctional language instead of saying clearly whatever you want to say, using something other than language that was so confusing that it wound up in court. For more about that, see this 2013 post.

I’ve found that those who invoke “tested” contract language generally don’t attempt to go into detail. They’re just happy to have a convenient excuse for inertia; they have no interest in offering evidence to back it up. So I invite Mike and any other proponents of “tested” contract language to offer examples of traditional language that it’s best to stick with. (To save time, I suggest that you look first to see whether I’ve had anything to say about the examples you come up with.)

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Updated 23 February 2016: I’m pleased that Mike went to the trouble to do a blog post responding to this post. Of course I will now offer my thoughts on his new post:

In his paragraph 1, Mike says that clarity is subjective and confusion happens, so you’re better off using “tested” language. But that doesn’t take into account that “tested” language is necessarily confusing language, as contract language gets tested only if people can’t agree on what it means. Far from being a safe option, “tested” language is risky. By steering clear of wording that people fought over, you reduce your risk.

Of course, what you use instead has to be clear. For that to happen, the drafter has to be familiar with the building blocks of clear contract language. I suppose my only concession to Mike would be that if you’re an indifferent drafter, you might want to stick with “tested” contract language, whatever the heck that might mean in a given context.

Mike’s paragraph 2 is unrelated to the notion that it’s safer to use “tested” language. Instead, Mike he says that it can be expedient to stick with traditional language. He won’t get any argument from me on that, although anecdotal evidence suggests that the obstacles to modern contract language are gradually diminishing.

In his paragraph 3, Mike in effect says that when given the choice between language that’s familiar but potentially confusing and language that clear but novel, he’ll stick with the former. Me, I’ll always go with clarity, because every stage in the contract process goes more smoothly when you use clear language, and it’s difficult to get into a fight over that which is clear.

Ultimately, it’s futile to discuss “tested” language without getting specific, so I’m pleased that Mike took up my challenge and offered as an example of “tested” language the “survival” language discussed by the Delaware Court of Chancery in GRT, Inc. v. Marathon GTF Technology, Ltd. (2011). I find it amusing that he picked that example. As I discuss in this post, in that opinion the court went out of its way to mention the alternative approach recommended in A Manual of Style for Contract Drafting but ultimately noted that it was faced with interpreting the language at issue. A lone reader suggested that the court had decided to publicly scold me; I and everyone else I discussed it with concluded that the court found my approach sufficiently interesting that it decided to give it some air time. I have no qualms sticking with my approach, which is simpler and, yes, clearer.

By pointing to an example of “tested” contract language that he’s inclined to stick with, Mike is an exception. It’s best to bear in mind that invoking “tested” language is generally a convenient excuse for sticking with archaic, bloated, and confusing language, with no attempt made to back up that excuse.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.