(b) Consistency

Do not use different words for important terms in the contract. Rather than being a novelist, a contract drafter must be consistent, reusing the same terms throughout the contract. Using different terms to express the same thought is a source of ambiguity and in any case can be confusing in a long contract. Examples of concepts that are sometimes expressed inconsistently include:

  • goods, product, equipment, tooling…
  • clause, article, section, subsection, paragraph, item…
  • rules, regulations, laws, statutes…

Draft contracts to reflect the reality of your business relationship. Contracts exist to facilitate business relationships. Consistency should not only exist within a contractual framework but also between the contract and its purpose: actual performance under a contract should be consistent with what was agreed and vice versa. This means that contract provisions need to be consistent with how a debtor, or a creditor, or the industry or/ business environment in which they perform, actually operate.

However, the different standards of conduct required in one-sided provisions in model contracts are troubling. For example, do all definitions of Confidential Information strictly require that:

…disclosed written information is marked ‘confidential’ or ‘proprietary’ (and oral information summarised in writing and identified as ‘confidential’ within 30 days after its presentation) .

Or does one also define Confidential Information to cover:

disclosed information, which must reasonably be deemed to be confidential?

Important: practices demanded from a counterparty must not contradict the same practices generally applied in one’s own organisation. Merely changing the provisions of an agreement will not drive organisational discipline into marking documents as ‘confidential’ or ‘proprietary’. A drafter’s contracting policy should also be consistent with real life.