It's been a long while since I've posted. Today's post is motivated in part by my frustration at contract-drafting flaws that I routinely come across. It is also motivated in part by the person who is sitting behind me this evening (well, Friday evening, since I won't post this until Monday) on the train ride home yammering on a cell phone. Both are like nails on a chalkboard.

Here are 10 things NOT to do when drafting a contract:

1) Do NOT use "shall" for rhetorical emphasis, i.e., do NOT use "shall" as a proxy for "I really mean it!" Example: There is no need to say "This Agreement shall be governed by New York law." The Agreement simply "is" governed by New York law. As I discuss in this post, use "shall" only to convey an obligation.

2) Do NOT use WITNESSETH anywhere in your contract. That goes equally for W I T N E S S E T H.

3) Do NOT write: "Party X may give notice to Party Y..." or "Party X may notify Party Y...." Was Party X otherwise prohibited from giving notice? This is an example of my general rule against conveying "naked discretion": giving a party "permission" to do something that it isn't explicitly or implicitly prohibited from doing.

4) Do NOT purport to obligate anyone who did not sign on the dotted line, as in "Party X's affiliates shall not sell any Goods." More on that here.

5) Do NOT base a condition on a desire, as in "If Party X desires to exercise the Call Option, then Party X shall give notice..." The first problem with that phrasing is that it's a fairly difficult task to determine when Party X has such a desire. The second problem is that, because the word "shall" is used in the consequent clause, Party X now has an obligation to give notice as soon as it "desires" to exercise the Call Option. More on this point here.

6) IF YOU WANT SOMEONE TO READ TEXT THAT IS REALLY REALLY IMPORTANT, THEN DO NOT USE ALL CAPS. CONSIDER USING BOLD FONT. IT IS VERY DIFFICULT TO READ ALL CAPS. IN FACT, WHEN I ENCOUNTER A PARAGRAPH IN ALL CAPS, MY FIRST INSTINCT IS TO SKIP OVER IT (OR TO PERHAPS READ IT IN MY ROBOT VOICE). ALSO, YOU LOSE THE BENEFIT OF ANY DEFINED TERMS IN THE PARAGRAPH; YOU CAN'T DISTINGUISH BETWEEN THE LOWERCASE "SECURITY" AND THE DEFINED TERM "SECURITY." FINALLY, THERE IS A GREATER CHANGE THAT YOU WILL MISS ERRORS OF YOU USE ALL CAPS.

7) Do NOT use language of obligation when you want to convey something that is occurring by virtue of the text. For example, if you want a document to amend a portion of an existing agreement, then don't write: "The Parties shall amend the Existing Agreement as follows..." All that does is obligate the Parties to amend the Existing Agreement; it doesn't actually amend the Existing Agreement. Instead, write: "The Parties hereby amend the Existing Agreement as follows..."

8) Do NOT write "NOW, THEREFORE [blah, blah]" in the lead-in to your contract, whether or not in ALL CAPS. "The Parties hereby agree as follows:" will suffice.

9) Do NOT state "not be deemed to be" when you really mean "be deemed not to be." The former negates a "deemed rule"; the latter creates a "deemed rule." For example, if you want to make clear that a certain action will not be considered "material," then do not write: "[Action] will not be deemed to be material." The action could still in fact be material. Instead: "[Action] will be deemed not to be material."

10) Do NOT incorporate recitals into the operative portion of the contract by reference. The recitals are mere precatory language. They set forth background and are often loosely drafted. Do not place or purport to place operative language in the recitals. If you want to include an operative provision, then just write that provision in the operative portion of the document.

Re-read these. See how many you agree with. Now pick up a contract that you are drafting or that has come across your desk. Can you hear a screeeeeech?

This article is presented for informational purposes only and is not intended to constitute legal advice.