Why are business contracts so complicated?

Because lawyers!

Seriously, business is complicated. Lawyers must ensure all possible contingencies, known and unknown, are covered. They also want to assure their clients that the contracts they draft are interpreted and enforced correctly; that means using antiquated words backed up by years of previous case law.

But must contracts be as difficult to read as they are?

Yes and no.

Why Some Contracts are Hard to Read

Sometimes, the attorneys are paid to make the contracts difficult to understand. It’s not a legal decision to obfuscate. It’s a business decision, L.A. Times columnist David Lazarus wrote.

Some big tech companies “often make it as hard as possible to know what personal data are being collected and how they're being used, how extensively your online activities are being monitored, and what your legal rights may be (or may not be) in case of trouble,” Lazarus said.

For example, for the average person, PayPal's privacy policy and service contract would take 92 minutes to read and comprehend.

He concluded, “This is unfair. And it's wrong. And it requires fixing.”

The Case for Plain Language

Writing for the Harvard Business Review, attorney Shawn Burton noted, “For the most part, the contracts used in business are long, poorly structured, and full of unnecessary and incomprehensible language.”

Burton's article, “The Case for Plain-Language Contracts,” detailed his experience as general counsel for GE Aviation, where his team was determined to write comprehensible contracts.

“Unlearning how to write like a lawyer was harder than we expected,” he wrote. “Plain-language contracting takes courage and commitment. It takes putting yourself in the customer's shoes. And it takes patience. In the end, it is worth the effort.”

Let's Be Clear

The trend in contract law is to be transparent. The European Union requires all privacy policies to be written “in clear and plain language.”

The Plain Writing Act of 2010 ordered federal agencies to write “clear government communication that the public can understand and use.”

Business contracts can be complicated, but they can be written in clear, precise language. Amin Law, P.C., is committed to transparency in business contracts. Call us today at (415) 851-4300 for a free consultation.