Tightening Up Contracts During a Downturn: The Slow Death of Legal Gobbledygook?
"But do not give it to a lawyer's clerk to write, for they use a legal hand that Satan himself will not understand" Cervantes
"Simplicity is the ultimate sophistication" Leonardo da Vinci
Gobbledygook is defined by the Oxford English Dictionary as, "official, professional, or pretentious verbiage or jargon".
OK, we put our hands up! Over the years, we, as lawyers, have been as guilty as other professionals in producing extravagant quantities of gobbledygook: gobbledygook in contracts, gobbledygook in wills, gobbledygook - well - pretty much everywhere. Indeed, we were so talented at this that the world kindly invented a word to describe this phenomenon: ‘legalese'.
It would certainly seem that legalese is still in rude health. Many businesses are inundated with incomprehensible contracts, impenetrable disclaimers and unhelpfully long-winded terms and conditions. However, underneath this veneer of good health, the world of legalese is under a slow but determined attack from - irony of ironies! - the law itself. The pace of change has also quickened as businesses realise that contracts which are unclear are difficult to enforce - something to be seriously avoided when many businesses are ‘tightening their belts'.
The obligation to use ‘plain and intelligible' language
For example, since 1999, the Unfair Terms in Consumer Contracts Regulations have stated that businesses that sell to consumers must have terms and conditions that are ‘plain and intelligible'. If a term is unclear the business may quite simply find that it is unenforceable. Indeed, the worst case scenario is that a set of poorly written terms is effectively unenforceable in its entirety. In such a case, a business needs to ask itself whether it is worth having such terms in place at all!
Office of Fair Trading guidance: 12 words instead of 98!
Unfair contract terms guidance by the Office of Fair Trading ("OFT") provides striking examples of changes that were imposed on a business to make their terms intelligible. The following 98 words, for example, were deleted from a contract:
"Time shall not be of the essence of the Contract and the Company shall not be liable for any delay in installation in the event of any strike, lock out, trade dispute, accident, fire, flood or any natural disaster or act of God or any contingency whatsoever beyond the reasonable control of the Company affecting the supply or installation of the Contract overleaf. Such suspension or cancellation shall not constitute a breach of Contract by the Company, nor will the purchaser be liable to claim for any loss or damage howsoever arising as a result of these circumstances."
and were replaced with a mere 12 words:
"the Company will manufacture and install the items within a reasonable time".
The OFT guidance also effectively bans the use of common words and phrases such as;
- "force majeure";
- "liquidated damages";
- "risk in goods";
- "pro rata";
- "time of the essence"; and
- "title to property".
The above terms are ‘bread and butter' to many lawyers but they mean absolutely nothing to some consumers. The OFT states that such words and phrases should not be used.
Critics have stated that the OFT has, in some circumstances, gone too far but one thing is certain: the law is increasingly frowning upon and, in many cases, banning the use of legalese.
What do I need to think about when producing legal documents?
- Who are the potential customers?
- Will they consult a lawyer over the transaction?
- Are they highly educated?
- Am I writing in their native language?
- What sales message do they get from the current standard terms?
The Plain English Campaign succinctly explains why gobbledygook is so dangerous. A woman wrote to them about a memo that baffled her. She said that receiving the confusing memo made her "feel hoodwinked, inferior ... frustrated and angry" - causing a divide between her and the writer. From a business perspective alone, can you afford to treat your customers in this way?
What's more, litigation tends to increase during economic downturns. Having clear and effective contracts in place means that you are putting effective systems in place to help protect your business from potentially expensive court claims.
We would be happy to discuss drafting effective legal documents with you in the context of your specific business activities or to discuss how relevant laws will impact upon your business generally.
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