Imagine a world where continuous improvement is the norm. Where ideas are tested and only the best ones adopted. Where inferior practices are discarded in favor of better methods.
This is Ken Adams’s vision of the world of contract drafting.
Ken is the author of The Structure of M&A Contracts as well as numerous contract-drafting articles that have been published in prominent legal journals and magazines. He also publishes the popular blog Adams on Contract Drafting (previously published as The Koncise Drafter, which I reviewed in The Reading List). Plus, he lectures at Penn Law School, conducts seminars around the world, testifies as an expert witness, and is the founder and president of Koncision Contract Automation, which I reviewed in Koncision: One Giant Leap. Readers of this blog know that I’m a big fan.
The centerpiece of Ken’s efforts is A Manual of Style for Contract Drafting, which is published by the American Bar Association. The first edition appeared in 2004 and the third edition was released in February 2013. I was privileged to read a pre-publication manuscript of the new edition and was excited to receive a review copy in the mail shortly after the book’s release.
Finally, I’m sitting down to write a few thoughts about the book.
In-depth analysis of drafting issues
With a focus few would have the patience for, Ken seemingly has thought about contract language from every possible angle. For example, Ken separates contract language into various functional categories, such as language of performance (“the seller hereby assigns”), language of obligation (“the seller shall assign”), and language of discretion (“the seller may assign”). Deconstructing language according to its function provides a framework for choosing clear, unambiguous language that memorializes the parties’ intent. If you’re not convinced of the importance of such clarity, consider the 2011 U.S. Supreme Court case Stanford v. Roche, which turned on whether the operative language at issue effected a present assignment of valuable intellectual property or merely required a future assignment.
Another example of Ken’s deep analysis is his treatment of ambiguity. The sources of ambiguity in contracts are pervasive and difficult to spot. For example, does “the stockholders shall notify the seller” obligate each shareholder to act individually or does it require the shareholders to act collectively? Either reading is reasonable. The word “or” is particularly challenging because it can be inclusive (where the phrase “A or B” means “A or B, or both”) or exclusive (“A or B” means “A or B, but not both”). Thus, “the seller shall dissolve subsidiary A or B” could mean “the seller shall dissolve subsidiary A or B, but not both” or “the seller shall dissolve subsidiary A or B, or both.” Ken devotes about 45 pages analyzing such issues.
Ken’s analysis helps drafters understand the tools of the trade — that is, the language of contracts — and thereby helps us draft clearer contracts that are less susceptible to arguments over interpretation.
As a style guide, MSCD3 sets forth standards for contract drafting. I’m not aware of any other publication that attempts to define contract-drafting standards so comprehensively.
Ken has countless recommendations ranging from using the serial comma to avoiding legalistic language, avoiding the terms “best efforts” and “hold harmless,” and dropping the recitation of consideration in the lead-in sentence. Some of Ken’s recommendations relate to critical drafting issues, while others seem more a matter of preference. But all are well-reasoned. Whether or not you decide to adopt Ken’s approach to an issue, your decision will be better informed once you’ve read Ken’s treatment of the topic.
Two of Ken’s recommendations on the lighter side that I find helpful are referring to time in a specific city (e.g., “6:00 p.m. St. Louis time”) in order to avoid mistakes involving Daylight Saving time (e.g., “6:00 p.m. CST [instead of CDT] on July 5”) and using the term “midnight” as a boundary for a point in time (e.g., “midnight at the beginning of the closing date” instead of “12:01 a.m. on the closing date”). These are simple and elegant solutions to common drafting problems and I use them in my contracts.
Prescriptive rather than descriptive
Ken’s approach is decidedly prescriptive rather than descriptive. He doesn’t merely describe contract-drafting conventions and usages — he analyzes current practices, critiques them, and recommends an approach based on whether it would lead to clear and concise contract language. While this has the benefit of releasing one from the bonds of sub-optimal conventions, it doesn’t necessarily provide comfort that a judge would look favorably upon a new approach. Lawyers draft out of fear, but adoption of some of Ken recommendations demands a rather bold fearlessness.
As an example, Ken spends a chapter talking about the term “reasonable efforts” and variants such as “best efforts” and recommends using only “reasonable efforts.” He writes, “If clients balk at using reasonable efforts, tell them that the caselaw doesn’t support the proposition that best efforts represents a more onerous standard (in the United States) or is confusing (elsewhere).” While it’s probably true that caselaw as a whole doesn’t support a distinction, that doesn’t mean that courts don’t make such a distinction in specific cases. Although wholesale adoption of Ken’s approach would have a positive long-term effect on contract-drafting practices, practitioners have to be mindful of potential results in specific instances.
Mark Anderson, a UK intellectual property attorney and the publisher of the IP Draughts blog, says this about Ken’s approach in his review of MSCD3, Improve your contract drafting. Step 1, read MSCD 3rd edn:
The perspective that Ken takes is one of making contracts clearer and more accurate in their language; one of the benefits of doing this is to reduce the opportunities for disputes over interpretation. However, he is not directly concerned, as a practitioner should be, with “winning in court”. It is not part of his brief to pander to the quirkiness of courts, or the encrustation of national or State case law. He is particularly critical of how some courts go about the business of interpreting contracts. For instance, he despairs of how the English courts make fine (and, in Ken’s view, misguided) linguistic distinctions between representations and warranties, or between best endeavours and reasonable endeavours, when these terms are used in contracts.
As practitioners, we’re more concerned about how courts actually interpret contracts rather than how they should interpret them even when the former doesn’t make sense.
Why I like MSCD3 as a practitioner
Here are some of the reasons I like MSCD3:
- It helps me write better. As I spend time thinking about Ken’s treatment of subjects such as categories of contract language and the sources of ambiguity, I become more informed about various aspects of contract language and better able to draft clear and concise contracts.
- Ken’s recommendations are based on research that I don’t have time to do. Contract drafting is Ken’s life’s work. But it’s merely one aspect of my work. He’s researched issues to a degree that I simply don’t have time for, and I benefit from his research as I read his reasoned recommendations.
- It’s a tool for continuous improvement. The book is a reference manual that facilitates a virtuous cycle of continuous improvement.
- It provides a basis for discussion. Whether or not you agree with Ken’s recommendations, Ken’s treatment of a topic is well-reasoned and contains a statement of opinion that can be tested and challenged in the sort of engagement that helps the best ideas thrive.
- It’s an initial step in establishing contract-drafting standards. Whether you’re talking about cell-phones, html, video recording, or some other technology, standards are a prerequisite of innovation. We already have the tools for a great wave of technological innovation in contract drafting, but without established standards, adoption of the tools will continue to be held back.
Ken Adams’s A Manual of Style for Contract Drafting has greatly informed my knowledge of contract drafting and is an essential resource for me. That’s why I keep it within reach while I work, along with Tina Stark’s Negotiating and Drafting Contract Boilerplate and The Chicago Manual of Style.