On Reading a Contract

I suspect that I don’t read contracts like other folks. When I’m in let’s-analyze-contract-usages mode, I trawl through contracts looking at how drafters express a given meaning. When I’m working on templates, I mine the client’s current templates looking for what to adjust and what to replace.

That’s different from reading a draft prepared by someone on your side of the transaction, or someone on the other side. Thinking about that more usual kind of reading prompted me to consult a couple of articles on the subject, this one by Tina Stark and this one by Scott Burnham.

I concur with what Scott says in his article:

Although we must know the protocols in order to read each kind of text, we are rarely taught them expressly. We are simply told, for example, to “read the contract” and left to our own devices.

It would be a good idea to be systematic about how one approaches reading a contract. That’s why I compiled my own rudimentary thoughts on the subject. For what it’s worth, here they are (in squished form, for some reason). They’re also here, in Word.

Reading a Contract

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.

4 thoughts on “On Reading a Contract”

  1. Ken:

    You might add the following section, depending on the context that causes you to read the contract:
    5. Is it organized for future readers?
    (a) Are the economic fundamentals near the front? Or, if the economic fundamentals are in an attachment, is that fact identified near the front?
    (b) Is the boilerplate and other stuff that business people don’t care about near the back?
    (c) Are topics covered comprehensively in one place, or does the reader have to skip around in the agreement to answer typical questions?
    (d) Do appropriate parts have useful titles?
    (e) Are defined terms easy to find?


  2. If the purpose of reading is partly as a prelude to negotiations, aNother (high level) angle is to try to get a sense of the drafter from their document. Are they using a template? Have they made an intelligent choice? Have they made thoughtful changes to express the deal? Can they write? Is the document full of typos? Are they expert, average or terrible? Have they left in any clues, eg their name in the attributes section of the document?

  3. I agree with Ken that wading through the definitions at the start is rarely appropriate – yet usually they are presented up front as a massive block to finding out what the contract says.

    Picking up on Chris’ point about tucking the boilerplate away at the back UK Acts of Parliament always put their interpretation sections and the definitions at the end.

    I sometime put the boilerplate and definitions for an agreement in a schedule at the end. I’ve never had any objections but I’ve never seen anyone else copy that arrangement either. Am I missing something?

    • I’m not a fan of putting parts of the contract somewhere other than in the contract proper. If a contract has a definition section, I put it toward the back, at the beginning of the boilerplate. A related question is whether you put a definition “on site” or in the definition section; see MSCD.


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