Sunday, 17 March 2013

A Blue Peter guide to writing like a Lawyer


It takes years of study and practice to write properly florid legal text. While celebrity lawyers like Stanley Fish have taken ill-advisedly to the presses to entreaty us to write all our prose the same way, no-one actually enjoys reading legal text: not even the curmudgeon who has taken such pleasure in writing it. Construing a contract should not be a boldily pleasure but an act of ascetic sufferance the reward for which comes in the hereafter[1]. Legal counsel does this so the client doesn't have to.

So here is a rare peak inside the fevered mind of a deal lawyer. Take a simple sentence conveying a simple proposition. The less content the better. For example:
Unless we hear from you before the end of the week, we’ll assume you are happy with the termsheet.
Now imagine you are the deal lawyer. Your client asks you to “just have a quick look at this statement to make sure this is ok”. Here is your chance.

The first job is to depersonalise. Law is a formal, not colloquial. It is business. We should not countenance a familiar “we” and “you”: this is a commercial contract not a family reunion, or an outreach centre. Parties should address each other as if they were unacquainted third persons.
Unless the vendor hears from the purchaser before the end of the week, the purchaser will assume the vendor is happy with the termsheet.
But why have easy-to-follow active tenses, when we can depersonalise things further, and elongate with denser constructions? The passive tense is your friend. (If you are a commercial lawyer, you have to take friends wherever you can find them).
Unless the vendor is advised by the purchaser before the end of the week, the vendor will be assumed by the purchaser to be happy with the termsheet.
This all still seems a little loosey goosey. Commercial lawyers have no truck with loose geese. It is time to start layering on detail. This is a painstaking job, and should be done in stages. First, be infinitely clear about the times, dates, deadlines.
Unless the vendor is advised by the purchaser on or before the close of business in London on Friday 22 March 2013, the vendor will be assumed by the purchaser to be happy with the termsheet.
I said infinitely clear. So don’t forget contingencies! What, for example, if 22 March is a public holiday?
Unless the vendor is advised by the purchaser on or before the close of business in London on Friday 22 March 2013 (or, if such date is not a business day in London, the close of business on the immediately following day that is a business day in London), the vendor will be assumed by the purchaser to be happy with the termsheet.
Infinitely clear, I said: We have not yet provided what should happen if the immediately following business day falls in the following calendar month. Perhaps there might be some adverse tax consesquences. You might have to book revenue in a different quarter. Who knows? Better be safe than sorry. After all, as deal counsel you can’t rule out a week and a half of public holidays being spontaneously declared (a Royal Wedding for example), or war suddenly breaking out. And you can be sure, if war should break out between now and the end of the week, the very first thing your client will do is sue your ass for forgetting to think about it. Sure as eggs. So be careful.
Unless the vendor is advised by the purchaser on or before the close of business in London on Friday 22 March 2013 (or, if such date is not a business day in London, the close of business on the immediately following day that is a business day in London, provided that if such immediately following Business Day would not fall in the calendar month of March, such date will be deemed to be the business day in London immediately prior to Friday 22 March), the vendor will be assumed by the purchaser to be happy with the termsheet.
As we inspect the detail, note that some of this original language is a bit sloppy. What is meant by “happy”, exactly? And what if our napkin contradicts the legal contracts we’re going to draw up?
Unless the vendor is advised by the purchaser on or before the close of business in London on Friday 22 March 2013 (or, if such date is not a business day in London, the close of business on the immediately following day that is a business day in London, provided that if such immediately following Business Day would not fall in the calendar month of March, such date will be deemed to be the business day in London immediately prior to Friday 22 March), the vendor will be assumed by the purchaser to have consented to the material economic terms of the transaction, as set out in the term sheet which is attached to this letter as an annex, such consent always to be subject to the legally binding terms of the transaction as shall be agreed between the parties on or before the closing date.
It still isn’t clear who we’re talking about. Just in case anyone is in any doubt, can we say? With infinite certainty?
Unless Joe Bloggs (such person, together with its successors and assigns, the “Vendor”, which expression will, unless the context requires otherwise, include reference to such person’s directors and employees (“Personnel”) but will exclude reference to consolidated and non-consolidated affiliates of such person, howsoever described (“Affiliates”)) is advised by John Doe (such person, together with its successors and assigns, the “Purchaser”, which expression will, unless the context requires otherwise, include reference to such person’s Personnel but will exclude reference to such person’s Affiliates) on or before the close of business in London on Friday 22 March 2013 (or, if such date is not a business day in London, the close of business on the immediately following day that is a business day in London, provided that if such immediately following Business Day would not fall in the calendar month of March, such date will be deemed to be the business day in London immediately prior to Friday 22 March), the Vendor will be assumed by the Purchaser to have consented to the material economic terms of the transaction, as set out in the term sheet which is attached to this letter as an annex, such consent always to be subject to the legally binding terms of the final transaction documents as shall be agreed between the parties on or before the closing date.
But hold on: what if my client agrees to change the deal in the mean time? Or events overtake us?
Subject to any subsequent mutually agreed amendment to the terms hereof between the parties, such amendments if made orally to be subsequently confirmed by the parties in writing within a reasonable period of time (provided that any failure to confirm such oral amendment shall not operate to vitiate such amendment) or any other written agreement between the parties, whether or not expressed as an amendment hereto, which is intended to modify the terms of this agreement, unless Joe Bloggs (such person, together with its successors and assigns, the “Vendor”, which expression will, unless the context requires otherwise, include reference to such person’s directors and employees (“Personnel”) but will exclude reference to consolidated and non-consolidated affiliates of such person, howsoever described (“Affiliates”)) is advised by John Doe (such person, together with its successors and assigns, the “Purchaser”, which expression will, unless the context requires otherwise, include reference to such person’s Personnel but will exclude reference to such person’s Affiliates) on or before the close of business in London on Friday 22 March 2013 (or, if such date is not a business day in London, the close of business on the immediately following day that is a business day in London, provided that if such immediately following Business Day would not fall in the calendar month of March, such date will be deemed to be the business day in London immediately prior to Friday 22 March), the Vendor will be assumed by the Purchaser to have consented to the material economic terms of the transaction, as set out in the term sheet which is attached to this letter as an annex, such consent always to be subject to the legally binding terms of the final transaction documents as shall be agreed between the parties on or before the closing date.
The problem is, now, that this is starting to look like a pretty onerous sort of obligation, so we need to be extra careful to protect your client’s interest. How do you know that your won’t be held to a technical provision with malicious intent?
Subject to any subsequent mutually agreed amendment to the terms hereof between the parties, such amendments if made orally to be subsequently confirmed by the parties in writing within a reasonable period of time (the reasonableness of such period as determined by the parties acting in good faith and in a commercially reasonable manner and provided that any reasonable failure to confirm such oral amendment shall not operate to vitiate such amendment) or any other written agreement between the parties, whether or not expressed as an amendment hereto, which is intended to modify the terms of this agreement, unless Joe Bloggs (such person, together with its successors and assigns, the “Vendor”, which expression will, unless the context requires otherwise, include reference to such person’s directors and employees (“Personnel”) but will exclude reference to consolidated and non-consolidated affiliates of such person, howsoever described (“Affiliates”)) is advised by John Doe (such person, together with its successors and assigns, the “Purchaser”, which expression will, unless the context requires otherwise, include reference to such person’s Personnel but will exclude reference to such person’s Affiliates) on or before the close of business in London on Friday 22 March 2013 (or, if such date is not a business day in London, the close of business on the immediately following day that is a business day in London, provided that if such immediately following Business Day would not fall in the calendar month of March, such date will be deemed to be the business day in London immediately prior to Friday 22 March), such Purchaser acting in good faith and in a commercially reasonable manner, the Vendor will be assumed by the Purchaser to have consented to the material economic terms of the transaction, as set out in the term sheet which is attached to this letter as an annex, such consent always to be subject to the legally binding terms of the final transaction documents as shall be agreed between the parties on or before the closing date.
Good faith. I like that. But wait a minute: if in acting in good faith that doesn't mean my client is somehow responsible to to its counterpart as some sort of fiduciary does it? Best be sure by using the great smart bomb in the lawyer’s armoury. For The Avoidance Of Doubt. No five words in the legal lexicon are more apt to create doubt where none before existed.
Subject to any subsequent mutually agreed amendment to the terms hereof between the parties, such amendments if made orally to be subsequently confirmed by the parties in writing within a reasonable period of time (the reasonableness of such period as determined by the parties acting in good faith and in a commercially reasonable manner provided that any reasonable failure to confirm such oral amendment shall not operate to vitiate such amendment) or any other written agreement between the parties, whether or not expressed as an amendment hereto, which is intended to modify the terms of this agreement, Unless Joe Bloggs (such person, together with its successors and assigns, the “Vendor”, which expression will, unless the context requires otherwise, include reference to such person’s directors and employees (“Personnel”) but will exclude reference to consolidated and non-consolidated affiliates of such person, howsoever described (“Affiliates”)) is advised by John Doe (such person, together with its successors and assigns, the “Purchaser”, which expression will, unless the context requires otherwise, include reference to such person’s Personnel but will exclude reference to such person’s Affiliates) on or before the close of business in London on Friday 22 March 2013 (or, if such date is not a business day in London, the close of business on the immediately following day that is a business day in London, provided that if such immediately following Business Day would not fall in the calendar month of March, such date will be deemed to be the business day in London immediately prior to Friday 22 March), such Purchaser acting in good faith and in a commercially reasonable manner, the Vendor will be assumed by the Purchaser to have consented to the material economic terms of the transaction, as set out in the term sheet which is attached to this letter as an annex, such consent always to be subject to the legally binding terms of the final transaction documents as shall be agreed between the parties on or before the closing date. For the avoidance of doubt, the parties enter this Agreement as arms’ length contractual counterparties, at what they consider to be market prices, for valuable consideration and without notice of any interests to the contrary and nothing in this Agreement will constitute or be construed as, or be deemed to constitute or be construed as, a joint venture or partnership between the Vendor and the Purchaser. Neither the Purchaser nor the Vendor shall assume or be deemed to assume any fiduciary responsibilities or other analogous obligations of a trust or agency nature, and each parties hereby acknowledges that it has obtained such legal advice as it as considered necessary or appropriate to assess the suitability and/or appropriateness of entering into this transaction and expressly disclaims any reliance on the other, or any responsibility for advising the other, as to any risks, economic, legal, regulatory, reputational or otherwise, which may arise (whether or not such risks to arise) as a result of the contemplation of the transaction contemplated herein.
And so our 19 word napkin scribble has evolved into a 500 word behemoth. And we haven't yet started inserting indemnities, let alone a governing law clause. It requires no particular acumen, but just sheer bloody mindedness, to carry on, as we lawyers like to say, ad infinitum. Ad nauseam, even.





[1] i.e., when the bill becomes due.

2 comments:

  1. Good job! I assume that this provision was already part of a contract as otherwise you would have added one of my favorite drafting abominations: "NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows." I am always amused when a lawyer with whom I'm negotiating reinstates this after I have deleted it. At least this heinous drafting flaw is a clear indicator that the lawyer doesn't know the first thing about contract law.

    ReplyDelete
  2. Good work! Thanks for post.

    ReplyDelete