The ContractStandards Style Guide

The ContractStandards Style Guide

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Style Guide / Guiding Principles

General

The ContractStandards Style Guide takes a modular, hierarchical approach to contract drafting, starting with the overall organization, delving deeper into sentences and words.

  1. Organization: Follow a consistent, logical organizational structure
  2. Headings: Use informative headings that serve as a summary of the contents
  3. Clauses: Break text into smaller units with one substantive topic per clause
  4. Sentences: Draft in short, declarative sentences
  5. Words: Use standard language, without jargon or legalese
  6. Punctuation: Use punctuation to aid readability

Organization

Apply a consistent structure: Contract Standards Framework for Exchange Agreements

  1. The Bargain. What are the parties buying or exchanging? Services, products, a license, property, etc?
  2. The Exchange. What are the mechanics of exchange? How will the parties give and receive value?
  3. Term. What is the time period of the agreement? When does it start? When does it end? Can the agreement be extended?
  4. Reps, Warranties and Acknowledgements. What statements, facts and actions are material to the bargain?
  5. Conditions. What actions, facts or circumstances must occur for the parties to close the transaction?
  6. Obligations. What actions or forbearances must each party continue to perform during the term of the agreement?
  7. Rights. What actions can the parties take to protect their interest in the bargain? Rights to terminate, adjust services or costs, etc.
  8. Remedies. What can the parties do in the event the other does not perform its obligations?
  9. General Provisions. How are disputes resolved? What laws apply? Who is benefited and bound by the agreement? How is the contract interpreted?

Clauses

Clauses consolidate all elements of a single concept

  1. Subject matter: Only one substantive concept per clause aids the reader’s understanding. Do not draft compound clauses, such as: “Entire Agreement; Amendment; Waiver.”

  2. Captions: Use informative headings that serve as a summary of the contents
    • All clauses should have a caption
    • Captions should be descriptive and general
    • Use the same caption for similar clauses in other documents
    • Each caption should be unique in the agreement. Do not duplicate captions:
      • Sub-clauses should not have the same heading at their top-level heading
      • Make headings more descriptive rather repeating them: Vendor’s Indemnity and Purchaser’s Indemnity, rather than two different clauses both entitled Indemnity
    • Use “General” only as the heading for the final article that includes the various “boilerplate” clauses
    • No “stop words” such as “the,” “a,” “an,” etc.
    • Include period at end of heading only if in-line
  3. Sections
    • Lower-case “s” for sections: section 3.1 (Payment)
    • Add the section title in parentheses after a cross-reference: referred to in section 8.1 (Term)
    • Use “section” for all subdivisions, such as subsections, paragraphs, subparagraphs, etc.: referred to in section 3.1(a) (Payment - Overdue Interest)
    • Use “sections” when two or more are referred to: section 3.1 (Payment) and 3.1 (Reimbursement)
  4. White space
    • Use white space to clarify meaning, particularly with lists
    • Break long clauses with multiple clauses into their own, separate clauses

Sentences

Sentences capture a single thought.

  1. **SVO: Draft in short, declarative sentences, using the form subject—verb—object.
  2. Subject: Clearly indicate the subject of the sentence. Avoid indeterminate subjects, such as, “There are no representations, covenants, or other terms other than those set forth in this agreement”.
  3. Modifiers: Clearly mark conditions, qualifications, and exceptions.
  4. Conditions: a prerequisite to an obligation or statement. For example: “If….”
  5. Qualification: a modification, limitation, or restriction to an obligation or statement.
  6. Exception: a situation excluded from the general rule.

Unless clarity suggests otherwise, the preferred sequence of sentence elements is [condition], [obligation or statement], [qualification or exception].

Words

Words are the essential building blocks

  1. Standard English: Use standard English, without jargon or legalese
    • Choose the simpler, commonly used word: provide rather than furnish
  2. Duplicate Words: Eliminate duplicative words: sell rather than sell, transfer, and assign
  3. Unnecessary Words: Eliminate all unnecessary words
    • Use “any” rather than “any and all”
    • Use “The Employer may…” rather than “The Employer may, for any reason whatsoever,…”
    • Decide if you need a descriptive list introduced by “including” - if you do, include only essential terms
  4. Numbers and Dates
    • Spell out numbers up to nine but use numerals for 10 and above
    • Use percentage symbol: 80%
    • Use words for figures of one million and greater
    • No short-form date formats: December 31, 1999 and not 31/12/1999
  5. “This agreement”
    • Refer to “this agreement” rather than “this Agreement”
    • There is no need to define “this agreement.”
  6. “shall,” “must,” and “will”
    • Use “shall” to mean [a party] has a duty to, such as “The Purchaser shall pay interest”
    • Except for shorter consumer agreements, avoid “must”; use “shall” instead
    • Use “will” to indicate futurity: This agreement will automatically renew…
  7. “reasonable efforts”
    • Use only “reasonable efforts” and not any variation (“commercially reasonable efforts”, etc.)
    • If aiming at a higher standard, do not use “best efforts” but define the standard
  8. Problematic words
    • Exercise care when using terms such as “affect” and “effect”, “alternate” and “alternative”, “assume” and “presume”, “between” and “among”, “further” and “farther”, “fewer” and “less”, and “principle” and “principal”

Punctuation and Grammar

Use proper punctuation and grammar to aid readability

  1. Commas, semicolons, and periods
    • Use the serial comma for phrases using “and” or “or”: A, B, and C or A, B, or C
    • Use the semicolon only as an alternative to a period; it is not as an alternative to a comma
    • Avoid periods in abbreviations: US rather than U.S.
  2. Quotations and apostrophes
    • Use “traditional” rather than “logical” punctuation: quotations follow commas and periods, although they precede colons and semicolons
    • Do not use apostrophes to indicate plurals: MDs, not MD’s
  3. Grammar
    • Proper use of “that” and “which”: “which” introduces a subordinate clause that is set off from the rest of the sentence by commas at the beginning and end

Special cases

  1. Avoid Latin terms: Use “for example” rather than “e.g.” and “in other words” instead of “i.e.”
  2. Avoid “and/or”: The phrase “A and/or B” may mean A or B, A and B, or A or B or both. Use the intended meaning.
  3. Do not underline: use either bold or italics for emphasis.
  4. Do not use full caps: NEVER USE THIS IN AN AGREEMENT.
  5. Use contractions to aid understanding: “the Company’s assets” rather than “the assets of the Company.”