Are you consistent?

The above question is not a question of integrity. It appeals to a key principle of contract drafting, or a general drafting principle, if you wish. This blog addresses a few aspects of consistency.

Your own examples are very welcome.

Other than a novelist, a contract drafter must be consistent. A variety in wording to express the same concept is a source of ambiguity (or even a starting point to seek a favorable interpretation of words) and anyhow confusing. Applying the same notions consistently within a given transaction makes contract negotiations easier for both parties. Because once aggravating inconsistencies are discovered, the reader will be suspicious about any other yet unidentified inconsistency. This does not facilitate contract review and negotiations.
Consistency should not only exist within a contractual framework but also between the contract and its reality: the actual performance under a contract should be consistent with what was agreed (or better) and vice versa. This means that contract provisions need to be consistent with how a debtor or creditor, or the industry or business environment in which they perform, actually operates.

Consistent definitions. ‘Definitions’ are an important tool to improve consistency throughout a contract or throughout transaction documents. It happens very often that the various lawyers use different terminology to point at the same concepts: the Buyer (alternative: Purchaser), Affiliates (Affiliated Companies of group companies), Parties (the parties hereto), of this Agreement (hereof). It happens too often that a contract includes both terminologies as a consequence of copy-paste drafting. To avoid this, differing definitions used throughout an organisation for the same defined terms should be made consistent. Tuning the defined terms used in all model contracts, should be part of contract upgrading work.

Clauses and real life. More burdensome are the different standards of conduct required by the various provisions used as model contracts. For example, do all definitions of Confidential Information strictly require that any disclosed written information is marked ‘confidential’ or ‘proprietary’ (and oral information summarised in writing and identified as ‘confidential’ within 30 days after its presentation) or do you also find examples regarding disclosures which must be deemed reasonably to be confidential? Any such definition should not contradict the general discipline of your own employees. Also, merely changing the provisions of a model confidentiality agreement will not drive organisational discipline in marking any disclosed documents. On the other hand, using both definitions can be acceptable depending on the context. If you do choose to work with both, think first: there may well be a good reason to require the above discipline in a patent department whereas it might completely obsolete for a sales department (or vice versa, for instance when you desire to keep incoming information excluded from the confidentiality obligations if they had not been marked).
Other example: many divestment type of transactions establish post-closing business relationships that are sometimes mutual. In such case, the services (or ongoing product delivery) will probably be dealt with in different contracts. Do apply one payment term for both parties: very few people acknowledge the reasonableness of agreeing on a short payment term for one party and a long payment term for the opposite party.

Consistent repetition. A drafter should choose a consistent usage when drafting a contract. For example, if you repeatedly refer to a course of related actions, apply the enumeration or natural order for such actions rigorously throughout the contract. Preferably you should use the enumeration or natural order in which they appear or occur in practice. Do not tinker for no reason with a natural order or sequence of actions used elsewhere in the contract.

Mark-ups and negotiations. Inconsistencies often arise when a provision is drafted and redrafted during the negotiation process. Do not resist reinstating consistency in a subsequent mark-up, even in sensitive provisions, but do so consistently (and accurately).

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