The Upside of Sloppy Drafting

Good lawyers draft contracts in clear English. Bad lawyers draft contracts

in dense legalese. But here’s the thing: sometimes dense legalese gets the job

done, where clear English would serve only to clarify the fact that the parties

to an agreement don’t actually agree.

Lee Buchheit, in his book

How to Negotiate Eurocurrency Loan Agreements, explains what the problem


Exceptionally poor contract drafting can actually convey an unfair negotiating

advantage to the proponent of a document. Rather than set out plainly what

is intended and engage, if necessary, in a candid defence of that proposition,

the truly inept drafter can suppress all meaningful discussion about his work

product. Defined terms are scattered throughout the agreement. Each defined

term incestuously references four other defined terms, with the result that

even the diligent reader quickly runs out of page-marking fingers. The number

and obscurity of the cross-references to other sections of this (or some other)

agreement would bring a crimson blush of shame to the authors of the US Internal

Revenue Code. Each sentence is clogged with the arteriosclerosis of unnecessary

words and distracting parentheticals, provisos and exceptions. In short, only

counterparties and their counsel willing to acknowledge the painful limitations

of their own reading comprehension will have much to say about the document.

In the specific case of M&A deals, Steven Davidoff is quite explicit about


this means:

Avoid complex drafting. If any section of your agreement has one

or more "to the extent applicables", "Notwithstanding",

or otherwise has too many caveats redraft it to make it clearer and unambiguous.

Stay awake the extra two hours to do this.

The Epicurean Dealmaker has an

interesting take on all this:

Surely, a great deal of such poor drafting can indeed be attributed to laziness,

haste, or sheer incompetence, as Professor Davidoff implies. But I have another

theory for you. Based on my experience, I believe a non-trivial amount of

such obscure legal drafting is in fact intentional. I believe some lawyers

draft clotted legalese or do not attempt to clarify others’ scribblings because

they realize, at a conscious or subconscious level, that the confusion in

the text reflects a fundamental disagreement or misunderstanding between the

parties to the agreement in question. Haste, pressure of time or events, or

sheer wishful thinking encourages such lawyers to whistle past a particular

graveyard, or let a particular sleeping dog lie. After all, virtually no-one—not

even most lawyers—actually wants or expects an agreement to end up in

litigation, and that is usually where the parties’ differing intent and interpretations

of sloppy contractual language is aired and ultimately resolved.

You can see this as cowardly, or lazy, but I prefer to view it as reasonably

pragmatic. After all, the great majority of merger agreements do not end up

in court, and you can bet that is not because they are all drafted to an ABA-approved

level of clarity and precision. Furthermore, lawyers understand that they

work for businessmen, who want to strike deals, but who themselves may not

have a good understanding of all the risks and issues involved in a particular

M&A transaction, much less how they feel about them. In such circumstances,

is it really so bad to cross your fingers and whistle past that nasty contractual

briar patch wherein lie all sorts of differing intentions and interpretations

of, e.g., specific performance? Not only is the perfect the enemy of the good

in contractual law, but arguably the bad is not necessarily the enemy of the

good, either. The intent of M&A dealmaking, after all, is to make deals.

The upshot from all of this is that sloppy drafting can be used, in practice,

to advance the interests of one of the parties under cover of utter incomprehensibility.

Any good lawyer who has removed that weapon from his arsenal has every right

to feel aggrieved that others might use it against him.

But at the margin, it is certain that deals have been done only by means of

expediently sweeping intractable issues under a rug of impenetrable prose. And

from the point of view of many bankers and even some lawyers, a done deal is

nearly always better than the alternative. It’s inelegant, but it’s hard to

deny that it can be effective. And TED would have you believe that if the agreement

doesn’t end up in litigation, then no harm, no foul.

My take on this is that it’s not a lawyer’s job to sweep anything under a rug

– that has to be a decision made by the principals involved. Lawyers work

for the principals, and if the principals are happy with sloppy drafting, then

so be it. Still, I wouldn’t employ a law firm which used this tactic. You end

up on public shit-lists like Davidoff’s. If a potential client sees a respected

lawyer writing "do not retain Wilson Sonsini," they’re unlikely to

retain Wilson Sonsini. And the one thing lawyers want even more than getting

a deal done is getting more retainers in future.

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