Keeping it Simple: The Best Contractual Language isn’t Complicated

Keeping contractual language simple is the single greatest way to avoid disputes down the road among the assigned parties. Everyone understands what’s expected of them, and what they stand to earn from living up to their ends of the bargain. A win for the vendor and a win for your business. Simple right? Not usually. Wanting to keep your contract’s word choices clear of ‘party of the first part’ type and actually making that happen are two separate issues entirely. Our attorneys navigate the complex world of business contracts on a daily basis. Here’s how we keep the details simple so our clients can walk away from the negotiating table happy with our work for them.

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Thorough Understanding of Obstacles and Goals

What does each party to the agreement want from the contract and what stands in their way from accomplishing that goal? For example, your business may want to obtain a sell price from a given vendor of $10 per pound of product, but the vendor’s desire to earn $15 per pound stands in the way. Because our attorneys understand what your company wants from the agreement, we can work on lowering the vendor’s asking price to come to a satisfy arrangement. Satisfying some of the vendor’s other needs — increasing the length of the agreement to provide a steadier income stream, for example — may encourage them to soften their stance on your pricing point. When we understand goals and obstacles, we avoid the complicated contract language that leads to problems later.

Complicated Language is a Red Flag

Colorful word choices and endless provisions may be necessary in contracts that involve multiple parties and billions of dollars, but smaller agreements between a business owner and another company may need 400 pages to get the job done. We’re not writing Finnegan’s Wake here — it’s a legally binding document.¬† We keep the language simple to avoid ambiguity and misunderstanding. If you as a business owner find yourself in a situation where a contract needs four to five pages of definitions just to nail down what the terms in the document mean, there’s probably something wrong with the document itself. Consult your legal team to draft a copy of the contract that everyone signing on the dotted line can understand and interpret.

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Use Paragraph Headings for Clarity

Readers like to skim — it’s a fact of life. Sometimes, we just don’t read the whole¬† paragraph and miss a key detail. When it comes to a contract, the details are all that matter, and missing one or two could lead you to sign an agreement that puts your business in a bad financial situation. Go in fear of any agreement that does not use paragraph headings to identify what each provision contains. It could be a sign that the drafter of the agreement is trying to hide some key provisions by creating a word soup effect.

If you, or someone you know, is in the midst of a contract negotiation, having an experienced legal team reviewing the documents can make all the difference. Call our attorneys today to discuss your commercial litigation manner in private. We both wants what’s best for your company — call now.