Four Contract-Drafting Axioms

To coin a phrase, We hold these truths to be self-evident:

It’s preferable to draft contracts consistent with a set of guidelines for contract language, as opposed to relying on conventional wisdom, improvising, or simply copying.

That’s why I wrote MSCD. It’s the only such set of guidelines, and with each new edition it becomes more entrenched. I’d be surprised if another set of guidelines were to appear anytime soon. In 2018 I’ll publish with the ABA a streamlined set of guidelines, for those who don’t need the exhaustive analysis offered in MSCD.

Contract drafting is a specialized activity. It’s best left to specialists.

Handling transactions and preparing optimal contracts for those transactions are two different activities, drawing on different skill sets. Having the same set of people at a company handle the entirety of both tasks will likely result in one or the other being handled less effectively. In my experience, it’s the quality of the contracts that suffers. Ideally, have specialists prepare templates, then have those who handle transactions take it from there. That’s why I became a consultant.

Once you have a sufficient deal volume, sufficient deal value, and sufficient need for customization, you save time, save money, ensure consistency, and reduce risk by automating the task of preparing contracts.

That leaves the issue of which technology to use. It’s essentially a choice between CLM software and Contract Express, something I discuss in this post.

But to put the three previous axioms in context, you have to consider the fourth:

Because people don’t like change, many will ignore the previous three axioms.

In the course of finalizing the awesome fourth edition of MSCD, and as I continue to see the shortcomings in contracts used at companies at all levels, I’ve become increasingly frustrated by the fourth axiom. I now find myself being gently frank: You have a problem. What are you going to do about it? That might rub some people the wrong way, but I’d just as soon be rebuffed as ignored.

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.