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Clarity in Contracts: Three Techniques for Expelling Ambiguity

By Alexander T. MacDonald

 

Clarity. Every client tells you she wants it. Every writing instructor tells you to strive for it. Every supervisor tells you to achieve it. But how do you achieve it? Clarity is easier said than done, especially in legal drafting—a format that doesn’t always lend itself to perspicuous prose. There’s no formula for clear drafting; it’s a matter of paying attention to the words you use and the potential ambiguities they cause. There are, however, a few tricks you can use to help you along the way. Here are a few.

 

Tabulation. The single biggest difference between clear and unclear contracts is tabulation. Whereas unclear contracts pile condition upon condition in a single sentence, clear contracts tabulate series and lists whenever possible. Not only does tabulation make a contract more readable, it also exposes and eliminates latent ambiguity. For example, consider this sentence:

 

 

During the course of this lease, it shall be the responsibility of the tenant with respect to the property to repair; clean; secure against theft, weather, or other damage; and maintain the property with reasonable care.

 

That sentence has a host of problems. It misuses shall; buries the obligation in a noun phrase (“the responsibility of”); and starts with verbal flotsam (“During the course of . . .”). But its biggest problem is its ambiguity. Can you see it? Because the drafter tried to jam all the tenant’s responsibilities into a single sentence, we’re left to wonder whether the last phrase, “with reasonable care,” modifies the entire list or just the final verb, “maintain.” That’s the kind of ambiguity that invites litigation. See how much clearer things get when we tabulate the items:

 

 

During this lease, the tenant is responsible for:

  Repairs

  Cleaning

  Protection against theft, weather, and other damage

  Maintenance of the property with reasonable care.

 

Now we know the answer: “reasonable care” only applies to the final item. Yes, this is a simple provision. But the trick works with even the most complex contracts. By breaking duties or conditions into discrete elements, you enhance readability and reduce the opportunities for misinterpretation.

 

Shall. Words of obligation are an abundant source of ambiguity. The worst offender is shall. The problem with shall is its chameleon-like qualities; it can change its meaning to fit its context. In some situations, it means must, whereas in others it means will. In still others, it can even mean may.

 

Consider this: “The Tenant shall pay the Landlord $1,000 in rent on the first day of each month.” Simple, right? In that sentence, shall means must. But later, in the same contract, we see this: “The term of this contract shall be two years.” Now what does shall mean? We presume that a single word has the same meaning throughout a contract. So does that sentence mean, “The term of this contract must be two years”? Or only that it “will” be two years? Worse, consider this: “Notice of termination shall be given at least 30 days in advance.” Does that mean notice “must” be given? Or that it “may”?

 

Shall causes no shortage of similar problems. So when you use it, you have to be conscious of all its potential meanings and make sure your sentence is amenable to only one of them. If you’re not confident you can do that, the best solution is simply to omit shall entirely. There’s always another word that can do the same work without causing the same problems. If you do use it, try to limit it to a single purpose—ideally, for imposing an obligation on the subject of the sentence (as in the first example, above).

 

Recitals. Recitals aren’t operative. That is, on their own, they don’t do anything. They’re in the contract just to provide context. They set out the relevant background and explain why the parties want this particular contract.

 

Or at least, that’s what they should do. But in practice, sloppy drafters frequently try to shoehorn in operative language. They define key terms or, worse, try to impose freestanding obligations on the parties (often by using the protean shall).

 

That’s a recipe for ambiguity. After all, recitals aren’t supposed to do any independent work. They’re just supposed to explain the contract’s purpose.

 

So what will a court do? Ultimately, it will do what it always does: try to discern the parties’ intent from the language on the page. But that’s a tricky proposition when dealing with recitals, which, again, aren’t supposed to create obligations by themselves. The parties may even have viewed the recitals differently; one may have thought the recitals were just nonbinding statements of intent, while the other may have thought they were just as binding as the other provisions. In the end, the parties may end up with a “dog law” contract—i.e., they don’t know what their contract means until they have their noses rubbed in it.

 

The safest thing to do is omit recitals entirely. They’re never strictly necessary, and they often do more harm than good. If you absolutely must have them, make sure to purge them of operative language—no definitions, no conditions, no obligations. That will take you one step closer to your goal, clear drafting.

 

And that’s the point: each tool you use should bring you a little closer to the ideal. You’ll never achieve perfect clarity in drafting; the English language doesn’t lend itself to mathematical precision. But you can steer clear of some of the more common sources of ambiguity. Clarity is a continuum, and every ambiguity you root out pushes you a little closer to the right end of the spectrum.

 

Alexander MacDonald is the editor in chief of the Practice Tips Series. He is a 2012 graduate of the William & Mary School of Law and works in the Office of the General Counsel of the United States Postal Service. He can be reached at amac2644 at gmail.com.