Registered European Lawyer Avv. Daniela Licciardo explains why grammar and language are just as important as understanding the black letter law in contract drafting.

It is pretty much a given that in order to draft a good contract, a perfect knowledge of the law (including any recent changes) is the only thing that really matters. But what happens if this is not enough?

We spend a lot of time worrying about putting the right references to the law in the contract, and checking that we are not missing any key information. However, sometimes we don’t realise how important it is to use the appropriate language.

If we look at the common mistakes that people make in contracts, such as commas in the wrong places, long and confusing phrases, or dubious clauses we create to avoid some sort of obligation, it is clear that something is missing in terms of language.

Language is crucial in contract drafting, although it can be undervalued or forgotten by lawyers. This is the reason why we are facing an increase of legal disputes arising as a consequence of bad drafting as shown also by recent case law (see, for example, Wood v Capita Insurance Services Ltd [2017] UKSC 24; First Personnel Services Ltd v Halfords Ltd [2016] EWHC 3220 (Ch); Arnold v Britton [2015] UKSC 36).

In fact, the courts pay much attention to grammar in contracts to determine the meaning of the document and to understand the parties’ intention as expressed in each clause.

A good understanding of each party’s position; due diligence in evaluating the risks connected to the contract; accurate research of the legislation; and robust negotiation to fully identify the parties’ mutual needs can be a total waste of time and energy if, at the end, the clauses are not able to reflect these good principles.

The courts pay much attention to grammar in contracts to determine the meaning of the document 

We often come across ambiguous terms and conditions in contracts, which can cause serious legal consequences for clients and lead to protracted negotiations to agree a revised version of the terms.

It should be our duty to avoid loopholes and amend any improper use of the language in a contract in the best interests of clients.

I have experience in different legal jurisdictions and have drafted contracts in different languages. I have discovered how common it is to overlook using defined terms and short provisions in a contract to reduce the risk of ambiguity. It is not enough to be up to date on the current legislation; we must remember the importance of using effective language, correct grammar and correct punctuation.

A missing comma can change the entire meaning of a phrase, and could lead to losing the dispute if one or more clauses becomes critical and ambiguous.

Communicating to clients

Another important aspect to consider is to communicate with clients in a way that avoids using technical terms that they do not understand. 

During my career, I have had to learn to interact with different kinds of audiences and understand how to make legal concepts clear for them. It is essential to know the balance between your duty to update the client on their case, and the risk of providing too much information that can only cause confusion, especially during a negotiation.

You should explain to clients how they can achieve their goals without risking significant legal consequences. Clients do not need to understand the law in its purest form, but they must appreciate how a particular provision can impact their objectives and, therefore, what action they need to take.

A missing comma can change the entire meaning of a phrase, and could lead to losing the dispute

They just want to know what needs to be done to conclude business and make it work. They may not understand the importance of a positive negotiation, which can take longer than expected if you cannot guide them through the process and explain things clearly to them.

The contract needs to mirror the parties’ intentions. Clients need to be satisfied that their interests and mutual obligations are clearly reflected and that they can easily rely on the terms and conditions within.

The parties’ understanding of the amount of risk that they are undertaking and any potential liabilities is fundamental. Sometimes, together with the uncertainty of limitations of liability clauses, these can create the basis for future disputes. This is why clear communication and correct language are key points when dealing with clients and contracts.

But there is no way of securing this understanding if we fail to communicate with clients clearly and effectively.

In conclusion, from my experience I can say that it doesn’t matter in which language you are drafting a contract or communicating with a client, you should follow the same principles.

It is important to be up to date on the legislation, but don’t forget about the importance of the different nuances and difficulties that the use of the language can create.