Revisiting the Layout of Australian Contracts

In this December 2011 post I considered document-design “bling” in Australian contracts. I’d now like to consider another issue relating to the look of Australian contracts: use of tabulated enumerated clauses.

Consider the screenshot to the right (click on it to see it full-size). I think it’s a compact but otherwise representative example of how Australian drafters like to break up contract text.

In MSCD chapter 3 I suggest that determining whether to tabulate a given set of enumerated clauses is a function of how many clauses are in the set and how long they are. If they’re relatively dense, breaking them out can make them easier to read.

But the sample contracts I’ve looked at suggest that Australian drafters routinely tabulate enumerated clauses regardless of how many clauses are in a set and how short they are. I find that tabulating even short enumerated clauses can make them harder to read, as it chops prose into unhelpfully short chunks. It also wastes space.

I also recommend in MSCD that in the interest of readability you use a full independent clause to introduce a set of enumerated clauses, a task often facilitated by working in the words the following. But in the sample Australian contracts I looked at, the drafters didn’t concern themselves about that, cutting off the introductory text any old where. That has two consequences. First, it breaks up the reading flow. And second, it encourages overuse of tabulated enumerated clauses. Rather than saying Acme shall: … (1) … ; … and (5) … , you’d likely be better off with a different structure, perhaps separate sentences without enumeration.

The extract included in this post exhibits these two characteristics. I don’t know that I’d bother tabulating the first set of enumerated clauses. And I find very awkward use of Interest as the only introductory text for the second set of tabulated enumerated clauses.

Overuse of tabulated enumerated clauses and use of unduly truncated introductory text can turn contract prose into something like the instructions that accompany an Ikea bookcase. That approach works when your information is best digested in bite-size morsels. I think that contracts are sufficiently complex that breaking them down into shopping-list-size components is counterproductive.

My approach is on display in this sample extract of a contract generated using Koncision’s confidentiality-agreement template. Would readability be enhanced by breaking up one or two of the blocks of text in that extract? Perhaps. But regardless, that extract represents a very different approach from that on display in the Australian contracts I’ve reviewed.

But I’m acutely aware that when it comes to document design, your habits can interfere with the perspective required to make general recommendations. I welcome your input.

By the way, the inefficient use of space in the Australian contracts I’ve looked at is aggravated by use of only hanging indents rather than a mix of first-line indents (for sections and subsections) and hanging indents (for tabulated enumerated clauses), as in the MSCD enumeration scheme.

[Update: Overzealous use of subsections is another way to break up contract text more than is helpful. The subsections in the extract in this post are slight, and you’ll see from my exchange with Mark Anderson in the comments that at least one of them could be whittled down further. I suspect that if I were to redraft this contract, I’d consolidate many of the subsections.]

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.