A Reference Set of Definitions?

While at a social event in Saratoga recently, I had the pleasure of meeting Jerry Kaplan, senior counsel in McDermott Will & Emery’s Chicago office. Ever the imaginative conversationalist, I turned the topic to—what else?—contract drafting. At some point in our conversation Jerry wondered whether contracts wouldn’t be more efficient if drafters were able to refer to a standard set of definitions, along the lines of the definitions stated in section 7701 of the Internal Revenue Service Code.

It’s certainly the case that the same defined terms crop up repeatedly—for example, for purposes of U.S. contracts, Person, Affiliate, Government Body, Environmental Laws, and Business Day, not to mention a slew of defined terms for government agencies (IRS) and legislation (ERISA). Surely it would make life easier for drafters, and make contracts shorter, if instead of including, yet again, in a contract definitions for all or some of those defined terms you could simply refer to some established set of definitions.

Judging from this comment by reader Art, English drafters have the benefit of such a set of definitions, as they piggy-back off definitions contained in the UK Companies Act.

For U.S. purposes, the challenge would seem to be whether any suitable set of definitions currently exists. (Jerry and I agreed that the IRS definitions are too tax-focused to serve that function.) Any suggestions? And do drafters in other countries (besides England) have the benefit of such a set of definitions?

I think that once an authoritative vendor of document-assembly business-contract templates arrives on the scene, they’d be best placed to develop such a set of definitions for purposes of U.S. drafting.

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.