Why Is Contract Drafting More Than Just Following the Rules?

This interview is part of Loio’s series of interviews with legal enthusiasts about the ins and outs of the legal industry.

The following is the interview with Laura Frederick, ex-Tesla and ex-Big Law technology transactions attorney with 25+ years of experience working on commercial contracts and operations, the founder of the How to Contract practical training platform, managing attorney at Laura Frederick Law, and author.

Once upon a time, in a land of legalese, contracts were considered rigid statements, a formal code made to stick to the law simply. But just like evolution calls for change and adaption, so has the art of contract drafting evolved. It demands a closer look beyond the traditional rule-following approach to mastery of finesse, precision, negotiation skills, and so much more. 

Laura Frederick, an ex-Tesla and ex-Big Law technology transactions attorney with over 25 years of experience working on commercial contracts and operations, is guiding us through this intricate process. 

As the founder of the How to Contract practical training platform, managing attorney at Laura Frederick Law, and accomplished author, she brings a wealth of knowledge and skill to the table. As she astutely puts it, “Drafting contracts is akin to the subtle art of composing a perfect symphony, a carefully woven delicate balance of the right notes. It’s more than just following a stolid rulebook.”

The rest of the article will include quotes from Laura Frederick and her guidance based on her extensive experience in legal contract drafting.

Understanding Contract Drafting Beyond Rule-Following

As an art and an essential tool in the legal and business world, drafting a contract is undergoing a significant transformation. Rather than being seen as a complex jigsaw puzzle where the pieces are simply about rules to be religiously adhered to, drafting contracts is now understood as a more intricate process that demands much more. It’s a paradigm shift in the perception, evolving from simply adhering to a rulebook into a multifaceted discipline requiring masterful language, negotiation skills, and adaptability to changing scenarios.

As we delve into the finer aspects of contract drafting for lawyers and for those who are in need, we realize that it is also about accurately capturing the essence of an agreement, ensuring all parties’ interests are well represented, and the contract remains robust and relevant even with changing legal and social landscapes. 

To truly get a firm handle on these nuances, there’s a need to step beyond the conventional rule-following approach. The focus should be on improving skills that make you an effective drafter, such as language mastery and precision, negotiation acumen, foresight, and flexibility.

Deep-Dive into Contract Drafting

Key skills and principles take center stage in drafting contracts, paving the way for clearer, adaptable, and effective contracts. Mastery of language, negotiation, foresight, and flexibility are integral to this craft. 

Let’s journey into the heart of contract drafting, exploring these core concepts and their significance in creating successful contractual agreements.

The skill of language mastery and precision

In the world of contract drafting, words weave magic. They can open pathways to understanding or lead to a labyrinth of confusion. Laura Frederick says, “Precision is the key — not just for the sake of clarity, but to earmark every karat of intent.” Let’s imagine two contracts, one created with meticulous precision and another with vague terminology. Which would you prefer? 

Craftsmanship in language usage, particularly the careful selection of words, can swing the pendulum in your favor during a dispute.

Contract drafting and negotiation

Consider contract drafting a chess game: the board is your contract, and the chess pieces represent the terms and clauses. Like a proficient chess player who skillfully maneuvers pieces to achieve victory, a fine drafter uses wisdom and strategy to arrange these contractual elements. They aim to create an advantageous position while maintaining fairness, encapsulating the intricate art of negotiation in contract drafting.

With her extensive experience, Laura likens this process to “tacit bargaining,” shedding light on its essence. This process underscores the significant role contract drafting plays in negotiation, with two underlying factors:

• Strategic positioning: Drafters need to set the terms and clauses to serve their client’s interests optimally.
• Maintenance of fairness: Drafters advocate for their clients but also have to ensure the contract remains balanced and fair. A lopsided contract can lead to disputes and potentially nullify the agreement.

This delicate balancing act serves as an effective compass guiding the contractual relationship’s flow.

Foresight and planning

A drafter needs to juggle multiple roles efficiently. They are lawyers ensuring legal compliance, negotiators defending their clients’ interests, and, importantly, soothsayers. They navigate the murky waters of the future, predicting potential disputes and understanding the inherent risks to craft suitable resolutions in advance. This high-value forecasting skill sets an average drafter apart from a highly proficient one.

Think of foresight in drafting of contract as an insurance policy. It acts as a protective shield, safeguarding the parties involved from unseen risks that may emerge in the future. Keeping a keen eye on the horizon for potential pitfalls and proactively finding solutions for them in the present is a crucial aspect of contract drafting. Every preemptive clause acts as a stitch in time that saves unnecessary legal entanglements and disputes in the future.

Flexibility and adaptability

Law is dynamic; it changes as societies evolve and new precedents are set. Therefore, the ability to draft flexible and adaptable contracts to possible future changes is paramount. Imagine locking a contract so firmly to the current laws that the contract crumbles under its rigidity when updates occur. “Contracts should be sturdy yet flexible, like a tree standing against a strong wind,” quotes Laura.

Strategies for Achieving Clarity in Contract Drafting

But how does one achieve this perfect symphony in contract drafting? Here are a few strategies:

• Simplicity: Make sure to distinguish complexity from sophistication. Jargon may sound impressive but could lead to misunderstandings. Choose simplicity and clarity over complexity.
• Consistency: Consistency in terminology is crucial to avoid any ambiguity. Tackle this by defining key terms clearly from the start.
• Context: Ensure every clause makes sense within the context. Often, a term makes sense in isolation but not within the entire agreement’s framework.
• Review: Regularly review your drafts. A fresh set of eyes can help identify and rectify potential confounding issues.
• Automated contract drafting: Use technological advancements like automated contract drafting tools. They enhance efficiency and accuracy, minimize human error, and save time. 

The symphony of contract drafting requires simplicity, consistency, context, and regular reviews. Implementing these strategies will help create comprehensive and coherent contracts that follow the rules and surpass expectations.

Conclusion

In its entirety, contract drafting transcends beyond simple rule-following. It inherently requires the mastery of language, negotiation skills, foresight, and adaptability, all coupled with the essential finale of achieving absolute clarity. 
This combination of elements reinforces that drafting contracts is not just about adhering to a set procedure. Instead, it is a comprehensive process that demands a range of skills for efficient execution, a fact that we, as drafters, whether fledgling or seasoned, should continually acknowledge and incorporate.