The Best Contracts are Simple
As a lawyer, I rarely use the word never. But it is never a good idea to draft a contract that’s difficult to understand. Using ambiguous language, confusing jargon, and inconsistent terminology puts you at risk of drafting an overly complicated mess that is confusing and challenging to implement. It also runs the risk that an outside party, like a judge or arbitrator, interprets the contract in a way you didn’t originally intend or anticipate.
The legal profession is infamous for using overly technical or outdated terminology. We even have a name for it – legalese. You can find words like “Heretofore,” “therewith,” and “witnesseth” in contracts. But they’re not used for much else in the 21st century. In fairness, today’s legal profession encourages using more simplified, streamlined language. Yet, complicated language in legal documents persists.
What’s with that? Two related MIT studies suggest that people use legalese in contracts to convey a sense of authority. People write contracts using buzzwords associated with the legal profession because they believe that’s how legal documents should sound. In a 2022 study, researchers found that center-embedded clauses were often found in legal writing. Center-embedding is the practice of including definitions for a term in the middle of a sentence. It’s a practice that can make it more difficult to understand text. In a 2024 follow-up study, researchers asked 200 non-lawyers to write laws prohibiting criminal conduct. All of the participants wrote laws with center-embedded clauses in them. The study concluded that participants used center-embedding because they believed it was a hallmark of legal writing and conveyed legal authority.
Another researcher argues that confusing text in legal documents boils down to inertia. Ambiguities and murky language in legal documents exist because lawyers have little incentive to deviate from existing form contracts or templates. These forms and templates evolve, and typically expand, over time making them more cumbersome and potentially confusing. Nevertheless, using them, as written, cuts costs, saves time, and mitigates the perception of risk. Attempting to perfect contract language could theoretically create unforeseen challenges. And a template might include standardized terms used in the business community to express certain legal concepts – making it feel risky to tinker with it. In other words, it’s not obviously broken, so we don’t fix it.
But no one really likes legalese. Another MIT study found that most lawyers prefer simplified contract language and believe it’s just as enforceable as traditional, more convoluted language. And there are clear benefits to using simplified language in legal documents. First, it’s clearer, leaving less room for misunderstanding. Second, it saves time and money. A former general counsel of GE Aviation’s digital-services unit undertook a three-year initiative to convert GE’s contracts into plain language. Prior to the initiative, GE contracts were up to 54 pages long. During the initiative, they were shortened to about five pages. Clients responded positively, and updated agreements took 60% less time to negotiate than previous contracts. Similar initiatives at two other companies had comparable results. A hospital simplified its billing statements and was able to recover an additional $1 million a month. And a travel company rolled out plain language instructions to help consumers navigate its flight-information system, resulting in 70% less calls to its help desk. The decrease in calls saved the company millions.
So, what does this mean for you? Speak plainly. It’ll save you time, money, and a headache. This is especially important when it comes to legal documents like contracts. The next time you find yourself writing a legal document, try using these three tips:
Avoid trying to “sound” like a lawyer. A contract boils down to agreeing to exchange something of value for something else of value. Generally, you don’t need magical words to do that. So, avoid using archaic language and legal jargon you wouldn’t normally use. And avoid doing things like defining terms in the middle of a sentence or center-embedding. Instead, define terms in separate sentences or use a footnote.
Say what you mean; then refine it. If you get stuck on how to explain what you want to happen in an agreement, try saying it out loud and writing it in the simplest terms. Then, you can go back and determine if there are opportunities to refine it.
Ask yourself: would a high-schooler understand this? The team at GE found it helpful to review language in contracts with the eye of a high-schooler. Imagine yourself as a high-schooler and ask if you could understand what your contract is trying to say. If a high-schooler couldn’t understand it, it’s a sign you need to simplify it further.
Lastly, remember: I’m here to help you. TTLR’s contract templates come written in plain language and include guidance on how to complete them. So, you can rest assured that you’re doing things legally but without the legalese.
