Exhaustive vs. conceptual contract style - Weagree

Exhaustive vs. conceptual contract style

Contract drafting style and legal culture are partly determined by the drafter’s own environment: despite considerable conversion of (national) contract drafting styles, each country has its historic particularities. For another part, every person is his or her own enemy: whether you like it or not, many aspects of contract drafting are still a matter of taste (and, like all human beings, a drafter is a creature of habits).

Of course, each person has a proper style. Many differences boil down to a drafter’s inclination to draft exhaustively certain manifestations or conceptually. This is also influenced by the person’s familiarity to rely on a codification or case law.

Draft conceptually or list manifestations. There are manifest differences between contracts originating from an Anglo-Saxon lawyer and those drafted by a European continental attorney. A US lawyer would be the most obvious example of the former group. The differences are threefold:

  1. Being exhaustive vs. conceptual: Common law originated contracts tend to phrase provisions in an exhaustive manner, listing the approximating words to make sure the entire concept is captured, whilst European continental lawyers dare to delete if the concept is addressed sufficiently clearly.
  2. Funny phrases: Common Law contracts tend to have somewhat cerebral words and phrases, which do not reflect reality but give strong feeling of reading a contract (e.gIn witness whereof even though there is no witness).
  3. Presentation: US style contracts are usually printed in a much more compact way, whereas European styled contracts, including in the UK, open up the page outline, especially of the first page (see under Form and presentation).

One of the most remarkable differences in the legal practices of the US and the European continent (with England somewhere in between), is the American tendency to be exhaustive (explicit) and the European attitude of drafting in a conceptual (‘abstract’) way. Apart from historical reasons, this difference is largely culturally determined.

Stipulate how, what, or why?

People with a predilection for ‘being explicit’ will likely focus on questions such as ‘how‘ and ‘what‘ whilst those with a ‘conceptual’, ‘deductive’ or ‘context-sensitive’ approach will be interested in the question ‘why‘. The first group of people, probably favouring the US legal tradition, would probably try to fit all aspects they can imagine to be important in the contract.

The second group will rely on an understandable dividing-line allocating the main obligations and risks amongst the parties. The latter group of people, discernible in Germany, France, Spain and Italy (but also England), would understand the bigger concept from a few words only and be able to work with scanty principles. The cultural distinction may also be explained by opposing ‘universalism’ versus ‘particularism’: universalists feel less bound by specific rules and regulations and more committed to universally determined (abstract) principles.

Exhaustive (explicit), or conceptual (abstract)?

Transposing this difference to contract drafting raises the issue whether contract provisions must be ‘exhaustive’, or may be rather ‘abstract’ and ‘conceptual’. Examples of the (‘exhaustive’) US style are phrases such as:

…modify, adjust, amend or otherwise change…
…any losses, actual damages, costs, fees, expenses, claims, suits, judgments, awards, liabilities (including but not limited to strict liabilities), obligations, debts, fines, penalties, charges, costs of Remediation (whether or not performed voluntarily), amounts paid in settlement, litigation costs, reasonable attorneys’ fees, engineers’ fees, environmental consultants’ fees, and investigation costs (including but not limited to costs for sampling, testing and analysis of soil, water, air, building materials, and other materials and substances whether solid, liquid or gas), of whatever kind or nature, and whether or not incurred in connection with any judicial or administrative proceedings, actions, claims, suits, judgments or awards…
…any and all substances (whether solid, liquid or gas) defined, listed, or otherwise classified as …, or words of similar meaning or regulatory effect under any present or future Laws [with Laws defined as …] …

Their respective equivalents ‘working’ under European continental laws would be:

…all damages, including all related costs and expenses…
…all natural and chemical substances classified as …, from time to time…

A familiar funny phrase illustrative for the difference between Common Law governed contracts and European continental contracts are the ‘words of agreement’: “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“.

In contracts governed by a European continental legal system (or a law historically based on the Napoleonic-Roman or Germanic legal tradition), it would be more than sufficient to write “NOW THEREFORE, the Parties agree as follows” or any convenient header distinguishing the parties and the background description (or nothing at all). (The words ‘now therefore’ should be included only if the contract has a preamble.)

In addition to drafting conceptually, a draftsperson should think analytically and draft ‘MECE’.

The cultural determinants are derived from: F. Trompenaars & P. Wooliams, Business across cultures, Capstone publishing; G. Hofstede, Cultures and organizations: software of the mind, McGraw-Hill; F. Trompenaars & Ch. Hampden-Turner, Over de grenzen van cultuur en management, Business Contact; D. Walker, T. Walker & J. Schmitz, Doing business internationally, McGraw-Hill, 2nd ed.

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