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LL.M. Finance / LL.M. International Finance
Thema:
Drafting of Contracts – Basics (I)
Referent:
Dr. Thomas Schürrle, LL.M.
Debevoise & Plimpton LLP
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Six Drafting Goals
1. Understandable
2. Unambiguous
3. Consistent
4. Precise
5. Complete
6. Elegant
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Drafting an Agreement
• Start with Thinking: use a pad
• Work with Good Models
• Plan to Spend the Time
• Beware of Negotiated Documents
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1. Understandable
• Make Sure You Understand Each Provision
Can You Explain It Simply?
• Remember Your Audiences
The Client
The Judge
Your Adversary
• Format for Understanding
Break Long Provisions into Chunks
Use White Space Liberally
Itemize whenever possible
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2. Unambiguous
• Ambiguity Can Result from “Silly” Errors
Grammar
Punctuation – mind the commata!
Syntax
• Or from Inconsistency, Imprecision or Incompleteness
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3. Consistent
• Consistent
The Same Phrase for the Same Meaning
Different Phrases for Different Meanings
• Logical Consistency
Consistent Words of Authority
• Legal Consistency
Use legal terms as provided by law
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What Was I Thinking?
• Seller will receive the Purchase Price at Closing. Buyer
will receive all of its right, title and interest in and to the
Property at Closing. Seller must also transfer possession
of the Property to Buyer at the Closing. Seller agrees to
deliver all Bills of Sale and other transfer documents as
the Buyer shall have requested at the Closing.
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Words of Authority
• “Shall” is an imperative
• “Shall not” is a negative imperative
• Avoid the word “must”
• “Will“ means the future
• “Agrees to“ and “mutual” are usually surplus
• Avoid legalese
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4. Precise
• The Provision Says what it Means
• And Only What it Means
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5. Complete
• The Provision Covers Every Intended Circumstance or
Consequence
• The Provision Answers Every Question that Needs
Answering
• The Provision Includes Adequate Detail
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6. Elegant
• Use Language Economically
Omit Unnecessary Words or Phrases; keep short!
• Favor
Short Sentences
The Active Voice
The Present Tense
Short Words
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Drafting Tendencies to Avoid
• Overly Complex Sentences or Paragraphs
• Provisos
• Legalese, Latin and Unusual Words
• The Words “and/or” and “said”, “aforesaid”
• Words and Numbers Together (except in Financial
Instruments)
• Obligations in Definitions
• Undefined Terms or Definitions of Unused Terms
• Inaccurate Cross References
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Selected Sources
• Working with Contracts, Charles M. Fox
• Legal Drafting, Thomas R. Haggard and George W. Kuney
• Legal Writing in Plain English, Bryan Garner
• How to Draft for Corporate Finance, Carolyn E.C. Paris
• Advanced Legal Drafting, Bryan Garner
• Thinking Like a Writer, Stephen V. Armstrong and Timothy P. Terrell
• A Manual of Style for Contract Drafting, Kenneth A. Adams
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