Lawyers often hear complaints about the unreadability of the language used in legal documents. Most lawyers are well aware that the public regards “legalese” with roughly equal parts contempt and distrust; why make a sentence inscrutable unless the lawyer is trying to hide something?

So if lawyers know that the documents they write are difficult to read, why don’t they just write them in simple, readable language? The short answer is something your English teacher probably told you: easy reading is damned hard writing. However, it is often worth the additional effort to make contracts understandable by non-lawyers.  
 
Communication is Hard
So why is it so difficult to draft a contract in plain, understandable language? The concept underlying the contract is deceptively simple; a contract is a set of mutual promises that a court will, to some extent, enforce. However, the implication of this simple idea is far-reaching. By giving the promises people make to each other in certain circumstances legal force, we are saying that individuals get to create the legal rules that apply to their relationships. As such, the ability to contract is nothing less than the ability to make the law that will apply to a particular relationship. That’s right. In a very real sense, when you enter into a contract with a vendor or a customer, the two of you are writing the law that controls your relationship.

Since the purpose of drafting a contract is to write down the promises that a court may enforce, the goal of writing contractual language is to find language that the parties to the contract, and ultimately a judge or arbitrator, will understand in exactly the same way. Many contractual disputes arise not when one of the parties is trying to act unfairly, but rather when the parties have a genuine and good faith disagreement about what they agreed to. For that reason, a contract needs to express the promises made in a way that can be interpreted by a number of different people in only one way.

One way to write contracts without ambiguity is to use the kind of language that has been traditionally used. Much of the legal jargon used in contracts has developed a specific meaning, through generations of use by lawyers and interpretation by courts, that lawyers and judges understand. It is often easier to use these time-tested terms than it is to try to capture the concepts they represent in more understandable language.

Legal jargon also allows lawyers to use a kind of shorthand. For instance, a farmer supplying a restaurant with produce may want to limit his liability to that restaurant to the amount paid for the produce. Rather than have a contract terms explaining that, in case the farmer fails to deliver suitable produce, he is not liable for any of the restaurant lost profits, damage to reputation, or other enumerated harms, the contract can simply state that the farmer will not be liable for any “consequential damages.” While the farmer and the restaurant may not understand the full implications of that terms, the lawyers and judges likely will.       

Your Momma Probably Told You That Anything Worth Doing Would Be Hard
The fact that it may take more time for your lawyer to write a contract in plain language, that both you and your customers can understand, doesn’t mean that you shouldn’t do it. In most circumstances, it is worth the effort to make a contract completely understandable to the parties.

First, clear communication builds trust. Your customers would rather sign an agreement that they do understand than one that they do not understand. Handing a new customer ten pages of fine print can send a signal that your goal is not to provide a valuable service, but to protect yourself. In contrast, if the agreement is written in such a way as to continue the friendly and direct tone that has been used during previous discussions, then the written contract can serve to strengthen the client’s perception of you as a straight shooter.      

Second, a readable contract can prevent expensive and time consuming litigation. I have been litigating contract disputes since Ally McBeal was on the air. I am pretty convinced that a sizable portion of these disputes could have been resolved, before the parties spent tens of thousands of dollars on attorneys fees, if the parties had understood the terms of their contract.

Third, in some circumstances — particularly cases in which one party is substantially more sophisticated than the other (such as agreements between large corporations and consumers or small businesses) —courts may refuse to enforce language that would be difficult for the consumer to understand.          

My advice to small businesses is to approach the agreement with the customer or a vendor as an opportunity to (1) avoid future litigation by stating the terms of the agreement in understandable language, and (2) strengthen the relationship by presenting a legal document that reflects the open and direct spirit in which discussions have taken place. I very much encourage entrepreneurs to find a lawyer who will work with you to make your form contracts clear, understandable, and still legally enforceable.