“Tested,” Meet “Market”

The biggest conceptual obstacle to clearer contract language is the notion of “tested” contract language—the idea that if a court offers its interpretation of confusing contract language, we’re forevermore committed to using that confusing contract language to convey that meaning.

But recently I’ve heard people discussing a related concept—whether a provision is “market”. A provision is “market” if it’s so widely used that opting to use a different provision would put one at a market disadvantage.

I suggest that there’s no reasonable basis for assuming that the notion of “market” provisions precludes clearer contract language.

First, that herd mentality is what has given us such wonders of contract-drafting nonresponsiveness as the “pari passu clause” in sovereign-debt contracts, something I discuss in this article.

And second, fixating on the notion of “market” is to confuse what you say in a contract with how you say it. A given concept might be standard, but that doesn’t prevent you from expressing that standard more clearly than it is conventionally.

As always, it’s unhelpful to deal in generalities. I invite any proponent of the notion of “market” provisions as an obstacle to change to suggest to me a provision that is market. I expect that I’d be able to make it clearer, and in a way that doesn’t render it somehow threatening or unpalatable.

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.