In our earlier articles, we have seen 5 points to note before drafting a contract and 5 signs of a well-drafted contract, Continuing therefrom, in today’s article I discuss components of a contract style guide.
If you have worked in a law firm, you would have noticed how all documents that are generated there, follow a certain look and feel. The typeface and point size is standard – usually Calibri 11 or Times New Roman 12. So are line spacing, clause arrangement, margin and para justification. Even the language follows a certain flow and structure.
This is called a style guide. It makes all documents coming out of a law firm uniform in their presentation.
Even many companies also have their standard templates for contracts. It is the job of their in-house team to maintain the style guide in case there are amendments.
During negotiations, I have encountered counsels telling me that they would not make any changes in their template, but would accommodate the negotiated changes in an addendum. This is one way to ensure their standard contract template is maintained.
However to me, a style guide is not only the cosmetic stuff like font size etc, but a set of principles of contract drafting that I have learnt over the years.
You may take ideas from here and create your own style guide for drafting contracts. Who knows, one day your style guide will become the style guide for your entire department.
1. Arrangement of clauses
I truly believe that a contract is a story of two people agreeing towards a common goal. So, it should flow logically without any bumps. How will a contract read, if right after the scope of work and consideration, you have the termination and indemnity clauses?
The following guideline may be adopted:
- General clauses laying down the norm should precede specific clauses laying down exceptions, procedures or limiting provisions.
- Important provisions (scope, price, term) should precede the relatively less important provisions (termination, confidentiality, indemnity)
- Clauses identifying causes of action (breach) should precede cause identifying their consequence (termination)
- Substantive clause (price) should be distinguished from procedure (payment modalities)
- Boilerplate clauses (notice, severability, entire agreement) come at the end
2. Informative Headings
I have come across contracts which set out the clauses without any heading and I always itch to add them.
In my view, informative and clear headings add gravitas to your contract. Headings also make it very easy to glance or skim through if you are trying to locate a particular clause.
Unless you are preparing a letter contract, it’s always better to have headings to your clauses. Don’t let your contract run amok like a rudderless ship. That’s why a contract style guide is necessary to keep in mind.
3. Look and Feel
This is my favourite part of creating a style guide.
Recently, I overhauled an existing template of a contract and the first thing I did was change the typeface, point size, paragraph spacing and add lots of white space in the document. Voila, a new looking contract was in front of me without any change of the content.
Of course, I amended the substance of the contract too, but changing the look and making it my own gave me a lot of satisfaction.
You may consider the following points for your contract style guide:
- Choose one of the usual formal typeface like Times New Roman, Calibri, Verdana, Arial, Cambria, Garamond or Georgia.
- 10-12 point size is good
- Always use left justified option. Universally this is considered to be most readable.
- Optimum spacing is between 1-1.2
- For margins, the default margin in Microsoft Word is good enough.
- Number your clauses as appropriate. If there are too many sub-clauses, then 1/1.1/1.1.1 makes sense. Else, 1/(a) is easier to use.
4. Table of Contents
It is always good to insert a Table of Contents to your contract if it’s a long one. I am sure you all are aware of this, especially if you have drafted research papers or moot memorials in law school. A Table of Content adds structure and sense of organisation to a lengthy and complex contract.
Inserting a Table of Contents is just a matter of a click of a button when you have used the pre-formatted Styles of MS Word.
5. Appendix or Schedule or Exhibit?
Many times, you may need to add descriptive content after the signature page, which are very much part of the contract. You would have seen many use the term ‘Appendix’, some use ‘Schedule’ especially if it’s a conveyance or lease deed, while other use ‘Exhibit’. There’s nothing to be confused about since they all mean the same thing.
“Exhibit’ is most commonly used in the US, while ‘Schedule’ and ‘Appendix’ are more prevalent in the commonwealth jurisdiction. Use whatever you must, but with caution.
If only you feel that you need to add descriptive narration about scope of work or service level standard or such topics, put them in Appendix.
It is not a good practice to put important clauses of the contract like scope of work or consideration after the signature page.
Now that you have gotten some idea about what is a contract style guide, here is an example of the Adobe’s Legal Department Style Guide. It is a very detailed and helpful one.
If you find yourself not agreeing with some of its content, you are not alone. This article and this article contain a discussion on the not-so-favourable points in the Adobe’s Style Guide as per the authors’ opinion. You are free to create your own style guide. Trust me, it’s a very enjoyable part of the process of drafting your own contracts.
If you want to read a book on contract style guide, buy “Manual of Style for Contract Drafting” by Kenneth Adams (Amazon link here). Undoubtedly, this is a seminal piece of work on this subject. He also has a popular blog on the same topic.
I must thank you all for taking precious time out to read my posts, comment and engage with me on LinkedIn. It means a lot that this blog is serving the purpose I had in my mind.
I have been asked whether contract drafting will be the sole focus of this website, given that I am writing so much on this topic. The answer is no.
I will delve into all practical aspects of lawyering in future. I have picked this topic of contract drafting first, since it’s vast and varied and will take up many more posts.
I promise to intersperse my series on contract drafting with posts on other interesting topics. Like my previous post on an important part of litigation strategy – handling huge, fat files.
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