How to draft clear and precise contracts

How to start drafting or tailoring your contract?

Drafting technique. Now, let us translate this into contract drafting. A draftsperson often deals with the question of how to address a subject of discussion (or agreement) and translate it into clear and unequivocal contract language. Contacts should be drafted in such manner that the future implementation of the contract by the parties will not show lacks or reveal an interpretation the parties had not had in mind, or leads to results different from which the parties intended.

Thinking analytically. To apply the drafting principle of ‘accuracy’, a drafter may wish to be exhaustive to ensure that a concept is well covered. An important guideline for improving accuracy (and confidence) is to think analytically and to draft, in McKinsey’s terminology,[1] ‘MECE’ (mutually exclusive, collectively exhaustive). In French philosophical terms, this method can be called ‘cartesian’, consistent with the ideas of Descartes. Applying MECE and Cartesian guidelines, drafters cut a larger contractual concept into comprehensible segments that encompass the entire concept, leaving no gaps and with no overlap.

McKinsey’s principle: drafting ‘MECE’. The two related concepts of ‘mutually exclusive, collectively exhaustive’ can be explained as follows: a description of acts or events is ‘collectively exhaustive‘ if no other act or event is conceivable. In contract drafting terms: describing a course of action is collectively exhaustive if all variants are captured (under the addressed conditions or circumstances). Subject matters are ‘mutually exclusive‘ if they exclude each other without any overlap.

The task of a contract drafter is therefore to think analytically, to create a systematic structure, and to write logically. To identify the smallest relevant details, the drafter may use techniques applying concepts such as:

  • substance vs. procedure
  • objective elements vs. subjective elements
  • content vs. form
  • cause vs. effects
  • a concept vs. manifestations of the concept
  • (chrono)logical sequence: before and after delivery/closing

By applying these concepts in the case at hand, a drafter may establish a conviction that the entire subject is captured by the contract.

[1]           The MECE-principle (pronounced MEESEE, as in see me) is addressed in two bestsellers by Ethan Rasiel (McKinsey): Rasiel, Ethan M. The McKinsey way, McGraw-Hill 1999; and Rasiel, Ethan M. and Friga, Paul N. The McKinsey mind, McGraw-Hill 2002 (both are translated into several languages).