Drafting techniques and contract language

Published by a ��Ƶ Banking & Finance expert

Practice notes

Drafting techniques and contract language

Published by a ��Ƶ Banking & Finance expert

Practice notes

This Practice Note offers general guidance on how to approach document drafting and explains the meaning of some common expressions used in legal documents. It also looks at how courts look at the construction of contracts and considers case law relating to contract interpretation and offers practical tips for drafting commercial contracts.

The fundamentals of good drafting

Well drafted documents share a number of common characteristics. They are:

•
legally enforceable
•
clear
•
well-organised, and
•
accurately reflect the agreement between the parties

Drafting and language are key to achieving those aims. Useful principles to bear in mind are outlined below.

Singular versus plural

It is often better (and easier) to draft general statements in the singular.

For example 'the Obligors must not create any security' could give rise to the argument that the restriction is on the Obligors collectively.

It is better to phrase a prohibition like this as 'no Obligor may create any security'.

Active voice versus passive voice

Usually, an active voice is preferable to a passive voice. Sentences using

Jurisdiction(s):

United Kingdom

Key definition:

Restrictive covenants definition

What does Restrictive covenants mean?

A covenant requiring the covenantor not to do the thing specified. In order to be enforceable, such provisions should be reasonable and necessary for the protection of the target company’s/target business’ legitimate business interests. Restrictive covenants in a SPA/APA restrict the seller’s activities during an agreed period so that the buyer can try and protect the value of the target company/target business being acquired.

��Ƶ