‘Lawyers have two common failings. One – they do not draft well. Two – they think they do’ (ALA, 1970)

Twenty years ago the National Consumer Council was advocating plain language in consumer contracts and even drafted a bill – the Plain Language Act 1985. Consumers are now protected against obscure language to some extent – although this was a European initiative.

In the past 20 years standard forms have become clearer, Parliamentary drafting has improved, and standard precedents produced by major law firms show plain language influence – logical order, indexes, good layout, short paragraphs. But bespoke drafting has improved little. The causes are not hard to guess:

(1) Fear of negligence – let’s use what is ‘tried and tested’ (though that may be a myth).

(2) ‘It’s not safe’ – but are archaic words and structures safer?

(3) Time pressure – repeat what was done last time, use precedents.

(4) Laziness – it takes effort to draft well.

(5) Education – grammar has not been taught in schools for years.

(6) Training – those who train young lawyers pass on their own drafting styles.

Guidance

There is no shortage of material on good drafting. ‘Clarity’ is an international association promoting plain legal language. Nor is there a shortage of examples of poor drafting:

Pomposity

The borrower must give more than one and less than three days’ notice to prepay interest.

What is wrong with two days? Or, if timing is that critical, between 24 and 48 hours?

Tautology

The client shall use the suite only for office purposes and for no other purpose.

Ambiguity

This agreement may be terminated by two months’ notice after 31 March 2006.

Does that mean notice has to be given after that date, or that it only need expire after that date?

Mistake

… replacement carpets to be approved by the landlord which approval shall not be unreasonably withheld unless of a like quality and of a similar colour and design to those existing.

Almost certainly a negotiating mistake (the clause originally omitting the words in italics).

Being too specific

This contract is conditional on the grant of planning permission prior to 31 December 2003 by the City of Westminster.

So would a permission granted on appeal not count?

The construction of documents

In Investors Compensation Scheme v West Bromwich Building Society [1998] Lord Hoffmann said:

I do not think that the fundamental change which has overtaken this branch of the law [ie the principles by which contractual documents are nowadays construed]… is always sufficiently appreciated… Almost all the old intellectual baggage of ‘legal’ interpretation has been discarded.

In Jumbo King Ltd v Faithful Properties [1999] the same judge added that:

The overriding objective in construction is to give effect to what a reasonable person rather than a pedantic lawyer would have understood the parties to mean. Therefore, if in spite of linguistic problems the meaning is clear, it is that meaning which must prevail.

Common-sense drafting

Aim to communicate unambiguously and clearly. A computer program has to be unambiguous – but it is not clear to most readers. Astory may be clear, but it is not intended to be precise. Good modern drafting must, however, achieve both precision and clarity. What is the natural and ordinary meaning? The points laid out below need to be borne in mind when drafting.

Who is it for?

That is the question that should inform every piece of communication. It is always more effective if it is in a language your listener understands. Who is your reader? Ultimately, in most cases, it will be the client.

Accuracy

Use the correct word. There can be a number of choices, but only two alternatives – ‘noisome’ has nothing to do with sound.

Syntax

The order of words can be critical. Perhaps more ambiguities are caused by incorrect syntax than any other drafting defect. One remedy is not to try to say too much in one sentence.

Style

In most legal documents avoid both informality and pseudo-Latin. The style of a formal letter is about right. For example, one might ‘use reasonable endeavours’ – but to ‘try very hard’ has no legal meaning. The following construction has no place in modern drafting:

The tenant hereby agrees –

(a) to pay the said rent

(b) to properly clean all the windows

(c) to at all times properly empty all closets

(d) to immediately any litter or disorder shall have been made by him or for his purpose on the staircase or landings or any other part of the said building or garden remove the same.

Prefer active to passive

Prefer shorter words

‘This contract may be determined by the purchaser giving notice’ reads better as ‘The buyer may put an end to this contract by giving notice’.

Use punctuation

As Lord Shaw said in Houston v Burns [1918]:

Punctuation is a rational part of English composition, and is sometimes quite significantly employed, and I see no reason for depriving legal documents of such significance as attaches to punctuation in other writings.

Layout and order

The simple process of breaking down a long paragraph into separate sections is a significant aid to understanding. As are the use of indexes, and placing ideas in a logical order.

Most books place glossaries and bibliographies at the end. Why do lawyers continue to place pages of definitions up front?

Some recent cases

Two qualities a drafter needs (apart from knowledge of the law) are precision and imagination. In most of the following cases the drafter failed in one or both of these.

What do words mean?

Queen Elizabeth’s School Blackburn Ltd & ors v Banks Wilson Solicitors (A firm) [2001] This case concerned the following covenant:

The Transferee will not construct any building on the Property which shall be … greater in height than the buildings now existing on the Property. [It begs the questions why the phrase ‘greater in height’ was used instead of ‘higher’.]

The transferee, a school, gave the covenant when they bought the land and started to build a new building higher than the ridge of the roof of the existing buildings but lower than the chimney tops. Their solicitor advised that this did not contravene the restrictive covenant. The Court of Appeal held that this was negligent advice as there was no decided case on what ‘highest’ meant in the context of a building.

The real failure, though, was in drafting. The parties had agreed the words, but not the underlying concept.

AIB Group (UK) Plc v Martin & anor [2001]

Mr Gold was a dentist. Mr Martin was a property trader. The two of them did some joint property development and entered into a joint mortgage to secure lending on 14 jointly owned properties.

Here are the relevant clauses:

• ‘Mortgagor’ means [Mr Gold and Mr Martin].

• If the expression ‘the mortgagor’ includes more than one person it shall be construed as referring to all and/or any one of those persons and the obligations of such persons hereunder shall be joint and several.

• The mortgagor… charges… the [14 properties] as a continuing security with payment to the bank… of all monies covenanted to be paid under clause 2 hereof.

• Clause 2

The mortgagor hereby covenants with… the bank… that it will on demand pay or discharge to the bank…

(1) all sums of money which have been or are now or may hereafter at any time or from time to time be advanced to the mortgagor by the bank…

(2) all other indebtedness and/or liabilities whatsoever of the mortgagor to the bank… present, future, actual and/or contingent and whether on any banking or other account or otherwise in any manner whatsoever.

Mr Gold also separately charged two of his own properties, and Mr Martin 28 of his. Each of these mortgages, the joint one and the two separate ones, were in the same standard form. The bank called in its loans. There was a substantial shortfall.

The question was whether Mr Gold was personally responsible for Mr Martin’s private debts, and the question turned totally on the interpretation clause. There were two possible interpretations.

(1) The literal one. ‘Mortgagor’ meant Mr Gold and Mr Martin jointly and each of them severally. That turned clause 2 into nine separate covenants. They were jointly, and each of them separately, liable for their joint debts and for their separate debts. So Mr Gold was liable for Mr Martin’s personal debts.

(2) The ‘distributive’ one. If one says Mr and Mrs Jones took their children to school one understands that to mean they are the parents. But if one says Mr Jones and Mrs Smith took their children to school one understands that to mean ‘their respective children’.

Their Lordships were divided. Only one of the five Law Lords supported the ‘distributive’ approach. But he agreed with the others, so the House unanimously decided that the words meant literally what they said.

Smith v Garrard [2004]

The covenant: ‘Not at any time to park vehicles upon or place any articles upon or in any way obstruct the free passage of any part of the Roadway over which other persons have rights of way’, did not stop car parking.

‘Other persons’, as a matter of law, did not have right of way over the whole of the roadway, so parking a car did not obstruct that right. This is an example of trying to say too much in one sentence – and of succeeding. The following points arise:

(1) It would have been better simply to refer to the road. No need to mention the right of way.

(2) ‘Any part’ suggests there might be parts over which persons did not have right of way.

(3) Why ‘vehicles’ and ‘articles’ (plural)? Why ‘upon’ rather than ‘on’? Why ‘roadway’ rather than ‘road’?

The following would probably have worked – and it is shorter:

‘Not at any time to –

(1) park a vehicle on the road; or

(2) place any other article on the road.’

Provisos

A proviso is ‘an all-purpose conjunction, invented by lawyers but not known to or understood by grammarians’ (see Driedger, The Composition of Legislation). Originally the words ‘It is provided that’ introduced legislative provisions, later contracted to ‘provided that’ or ‘provided’. Today the words introduce a qualification to what went before, but are often misused – and provisos to provisos are all too common, particularly as amendments to documents. Here is a typical (but invented) example:

The buyer shall use all reasonable endeavours to obtain planning permission PROVIDED THAT the buyer shall get the consent of the seller to the form of planning application PROVIDED FURTHER THAT such consent shall be given within 10 days.

The second proviso is a true proviso. If the seller does not give consent within ten days the buyer can go ahead without it – but it could have been expressed so much more clearly as ‘If the seller does not make a decision within ten days the seller’s consent is not required’.

What about the first proviso? It literally means the opposite of what the drafter intended. If the buyer does not get the seller’s consent the buyer has no obligation to use reasonable endeavours. The drafter actually meant it to be an obligation, and should have framed it as one.

Burford UK Properties Ltd & ors v Forte Hotels (UK) Ltd & ors [2003]

A rent review every 14 years of a 99- year lease was to be decided by reference to net bedroom revenue (NBR). The NBR was to be calculated by deducting certain amounts from all charges received for bedroom accommodation at the hotel – and the definition went on:

PROVIDED ALWAYS that (1) the Tenant shall at all times use its best endeavours to obtain the maximum revenue from the use of bedrooms as sleeping accommodation and shall not take bedrooms out of service for redecoration except in accordance with the normal practice of the hotel industry.

The court’s unanimous decision was that the proviso was not an obligation but a hypothesis by reference to which the NBR was to be calculated. In other words, if the tenant had not in fact used best endeavours to maximise receipts, the formula was to be applied as if the tenant had.

Conditional contracts, options and overage

The greatest precision is required in framing conditions, particularly as the courts often construe them literally. Like the example in the following case.

Freund v Charles Scott Developments (South Devon) Ltd [2002]

Freund agreed to sell land to T, ‘hereinafter called “the Purchaser”’. The sale was conditional on planning permission being obtained within a stated period. The agreement defined ‘Planning Permission’ as permission obtained ‘following a planning application… made by or on behalf of the Purchaser’.

T assigned the agreement to Charles Scott, who applied for and obtained planning permission. T then notified Freund of the assignment. Freund refused to complete the sale. The condition had not been fulfilled as the permission was not granted on T’s application, so was not ‘Planning Permission’ as defined. The judge at first instance and the Court of Appeal unanimously agreed.

Ministry of Defence v Country & Metropolitan Homes (Rissington) Ltd & anor [2002]

Developers bought a large area of land that included a ‘hatched area’ on which 37 houses stood. Overage was payable on implementation of planning permission. However, the hatched area was excluded from the overage obligation if the 37 houses were demolished. The developers got planning permission for the hatched area, demolished 35 houses, built 26 new ones and converted the remaining two houses into shops.

They had to pay over £800,000 overage. Had they demolished the last two houses and built new shops there would have been no liability for overage. Even though the conversion was sensible, it was no part of the court’s business to rewrite the parties’ bargain.

Chartbrook Ltd v Persimmon Homes Ltd & anor [2007]

A very recent first instance decision. All turned on a classic ambiguity in drafting, which an algebraic formula should have avoided. Where do the notional brackets go? Overage was expressed to be: ‘23.4% of the price achieved for each residential unit in excess of the minimum guaranteed residential unit value [ie land value] less the costs and incentives’.

So, was it:

(1) ‘23.4% of (price minus land value)’, giving a result of £4.6m; or

(2) ‘(23.4% of price) minus land value’, giving a result of £900,000?

On all the evidence the judge held that overage should be the higher figure, dismissing Persimmon’s case both on how the clause should be construed and on rectification. Words can be ambiguous. Formulae may contain mistakes. It is always worth including worked examples to demonstrate the parties’ intentions.

Conclusion

Words we take a moment to draft in the midst of a busy practice may be painstakingly dissected in a court hearing lasting days. How could we possibly have meant that? We all make mistakes, but following some of the suggestions in this paper should reduce the likelihood of our creation featuring in someone else’s essay.  © Property Law Journal