I noticed the most recent post by Chris Simkins on his Improving Contracts blog. Entitled L2L Contracts: Thinking beyond B2C and B2B, it explores the implications of, well, L2L contracts.
What are L2L contracts, you ask? Here’s what Chris says:
When I use L2L, I don’t mean a contract between two lawyers, or two law firms. I’m using it to describe the people who are primarily involved in preparing and agreeing the contract. Through that lens, an L2L contract becomes one where it’s lawyers that lead the process of writing, reading, negotiating and finalising the contract documents on both sides.
Chris’s post is insightful and timely. It prompted the following thoughts.
The Legal Style: It’s Worse Than You Think
Chris refers to “a (growing) cultural divide” between B2B (business-to-business) and B2C (business-to-consumer) contracts, on the one hand, and L2L contracts, on the other hand. One problem is how L2L contracts are written. Here’s Chris’s take:
Lawyers are trained and conditioned to use a legal style, which not only becomes familiar, but actually becomes easier for them to use. It’s a sort of code where words and phrases develop common meanings.
Some of this is not just OK, it can be positive. And the same sort of thing happens in other walks of life. Doctors talk doctor. Accountants talk accountant.
The problems come when someone who’s not a lawyer (or used to working with legal documents) needs to read and understand a contract. The obvious example being a consumer that struggles to read online terms and conditions – or, more likely, just ignores them.
Legal language can be hard to follow for anyone who’s not used to reading it. The trouble is, it’s also hard for those who are used to reading it to stop writing it. And that’s because lawyers typically learn their craft in a culture of L2L contracts.
This view is widely shared by those who think traditional contract drafting isn’t ideal—”Hey, lawyers! Think about the rest of us!” But it doesn’t reflect what’s actually going on.
Traditional contract language, in all its legalistic glory, doesn’t function as legitimate code. Instead, it’s a semiliterate mess, in terms of both what it says and how it says it. And lawyers are squarely among the bamboozled.
If you want evidence to that effect, I’ve compiled a mountain of it. Leaf through A Manual of Style for Contract Drafting, or browse my articles and my blog posts. For example, you could read my assessment of use of the phrase consequential damages in limitation-of-liability provisions (here). You could read my three most recent posts on M&A drafting (here) for examples of basic misconceptions. Or you could read my article about efforts provisions (here).
So let’s put an end to the notion that traditional contract language reflects lawyers communicating efficiently with other lawyers. It’s an explanation that appeals to the vanity of lawyers, who are partial to any take that suggests that lawyers are smarter than others.
Instead, let’s acknowledge that traditional contract drafting consists of smart people engaging in a dumb process, because they’re oblivious, because they don’t have any other choice, or because cognitive dissonance has left them incapable of recognizing the mess for what it is.
Let’s Not Forget MSCD!
Under the heading “The Times They Are A-changing,” Chris mentions some trends that suggest the potential for moving away from the L2L mindset.
To that list, I would add the arrival and maturity of A Manual of Style for Contract Drafting. (I hope that’s not too bumptious!) For contracts to be clear and concise, those who work with contracts must be informed consumers of contract language. The path to becoming an informed consumer of contract language passes through MSCD, now in its fifth edition. As a guide to the building blocks of contract language, it’s the only game in town.
Fallible Drafting Isn’t Limited to L2L Contracts
Chris describes a move away from legalistic drafting:
The last decade has seen huge amounts of attention and investment focussed on streamlining how contracts are agreed and managed. There’s plenty of drivers for this, but the obvious ones – it won’t surprise you to hear – are reducing time and cost.
One way of achieving those aims is to reduce dependencies on lawyers wherever you can (and where appropriate). To achieve that, it helps to start creating contracts that business people can use with little or no support from lawyers. Or, to put it another way, it helps to deliberately start creating B2B contracts instead of L2L contracts. And so, very slowly, this is starting to happen.
I too have noticed this trend, but I’ve also noticed seen that the backlash against legalistic drafting can lead to naivety about what’s required for business contracts to work well. See this 2017 blog post for an example of that.
“Tested” Contract Language? No Thanks!
Chris suggests that the urge to draft clearer contracts is at odds with the tendency of lawyers to rely on “tested” contract language for boilerplate provisions, such as limitation-of-liability provisions.
That’s certainly the case, but assessing the implications requires acknowledging that relying on “tested” contract language doesn’t offer a refuge. Instead, it’s another source of dysfunction, because it causes you to rely on contract language that has resulted in fights. (For links to my various posts on this subject, see this blog post from last month.)
So reliance on tested contract language shouldn’t be a source of tension. Instead, it’s more traditionalist dead wood to be carted off in favor of expressing clearly whatever arrangement you want.
The second half of Chris’s post is about how we bridge the gap between B2B and B2C contracts and L2L contracts.
I think the fix will require work, but it will be straightforward work. Once you accept that traditional contract drafting is dysfunctional and that the blueprint for clear and concise contracts is to be found in MSCD, there’s no longer any mystery regarding what modern contracts should look like, in terms of how you deploy the building blocks of contract language to say whatever you want to say.
But as Chris notes, that leaves us with a challenge:
The challenge for anyone wanting to adopt a different style is that they face the prospect of doing something that’s likely to be slower and harder – and by extension, more expensive – at least until such time as there’s easy and widespread access to suitable resources to reuse.
I’ve been bleating about this challenge myself for 15 years. Let’s see what we can do to address this challenge.
A Valid Distinction Remains
Once you consign L2L contracts to oblivion because of their dysfunction, you’re left with a valid distinction—that between B2B contracts and B2C contracts.
Aside from the difference in the kinds of transactions expressed in the two categories of contracts, the difference is primarily a function of terms of art. In MSCD, I define business contracts as “contracts between businesses that either are experienced in handling transactions or are represented by lawyers.” That level of sophistication justifies using legitimate terms of art—ones that it would be a nuisance to have to replace. In MSCD, I offer security interest as an example. Legitimate terms of art can be distinguished from problematic terms of art, unnecessary terms of art, and improvised terms of art.
Of course, whether a term of art is legitimate term might be up for discussion. See for example this 2022 blog post about indemnify.
By contrast, for purposes of B2C contracts, it would be best to assume that consumers won’t understand terms of art.