Using Recitals to Tell a Story

I recently reviewed for a company a draft settlement agreement that had been prepared by outside counsel retained by the company. I thought the draft needed help. In particular, I found the recitals bloated and vague:

RECITALS

A. As of the date of this Settlement Agreement a dispute exists between AcmeTek and Widgetz regarding the contracts made between them. AcmeTek was chosen by Widgetz in 2006 and tasked with work including the development of Software Requirements Specifications (SRS) for the Widgetz Web Application, the development of the Widgetz Web Application, and the development of Widgetz’s Logo. Statements of Work or Work Orders or Proposal Approvals or other Agreements (collectively the “Contract”) were agreed upon in order to carry out the work. AcmeTek and Widgetz disagree on both the interpretation of the Contract, particularly the Statement of Work for the Widgetz Express Web Application dated September 18th 2006, and the value and execution of the work done so far. Disagreements also exist on both sides over the completion and/or execution of some or all of the work performed by AcmeTek for Widgetz till date. Widgetz has now discontinued AcmeTek’s services on the development of the Widgetz Express Web Application and disputes/disagrees with some or all of the work done so far. AcmeTek and Widgetz also dispute both what amounts are owed or owing under the Contract and to whom, and whether or not there was a breach of the Contract and by whom..

B. As the result of arms-length negotiations, AcmeTek and Widgetz (together “Parties”) have reached and now wish to enter into a full and final settlement of all claims that were asserted or could have been asserted arising out of or relating to the Contract (collectively the “Dispute”).

TERMS

The Parties, in consideration of the promises, releases and covenants contained herein, and for other good and valuable consideration, the receipt of which and legal sufficiency of which are hereby acknowledged by all the Parties, therefore agree as follows:

I ended up doing remedial work on the agreement. Here’s my version of the recitals:

In 2006, Widgetz engaged AcmeTek to develop software requirements specifications (SRSs) for the Widgetz web application, develop the Widgetz web application, and develop Widgetz’s logo (this development work collectively, the “Services”). The understanding of the parties regarding the Services was established in one or more statements of work, work orders, and proposal approvals issued by the parties and in telephone conversations and email correspondence between the parties.

The parties subsequently disagreed over exactly what work AcmeTek was required to perform in providing the Services. Among other things, the parties disagreed over interpretation of the statement of work dated September 18, 2006, regarding the Widgetz Express web application. The parties also disagreed over the value and acceptability of work that AcmeTek had performed, whether either party had failed to perform in accordance with the understanding of the parties, and whether either party owed the other any money in connection with AcmeTek’s performance of the Services. (All such disagreements collectively, the “Dispute.”) The parties now wish to resolve the Dispute.

The parties therefore agree as follows:

My version reflects the pared-down MSCD style: no headings, no enumeration, and certainly no traditional recital of consideration. I also got rid of those hallmarks of bureaucratese, the passive voice and buried verbs, and I overhauled the defined terms.

But more generally, I used simple narrative prose. The language of the body of the contract is so limited and stylized that contract drafting is analogous to writing software code. The only place in the contract where you’re free of those constraints is the recitals. Take advantage of that—if the reader would benefit from knowing the story behind the transaction, tell it in a straightforward manner. To be sure, you’re not writing the Great American Novel, but given the contrast with the rest of the contract, you’ll feel like Hemingway. And your readers will certainly appreciate it.

And notice how the original version was 293 words long, whereas my version weighed in at 174 words, or 60% of the original. So not only does my version tell the story much more clearly, it’s also drastically shorter. Clearer generally means shorter.

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.