Podcast | The Plain English Difference, part 2

The Plain
English Difference part 2

 

  • Contract templates might seem like an easy quick-fix but the complicated legalese they are written in isn’t just irritating, it can actually harm your business. 
  • Difficult to understand language means ambiguous terms of business. This creates headaches for customers, puts strain on business relationships, and can end up trashing your reputation. 
  • In this two-part episode, Trevor Fenton uses examples to explain how taking the time to write commercial contracts in plain English is better for your business, your brand, and your bottom line in the long-run. 
+ - Podcast details
Episode Title: The Plain English Difference: Part 2 of 2 
Podcast Description: 
  • Contract templates might seem like an easy quick-fix but the complicated legalese they are written in isn’t just irritating, it can actually harm your business. 
  • Difficult to understand language means ambiguous terms of business. This creates headaches for customers, puts strain on business relationships, and can end up trashing your reputation. 
  • In this two-part episode, Trevor Fenton uses examples to explain how taking the time to write commercial contracts in plain English is better for your business, your brand, and your bottom line in the long-run.
Speaking: Dayle Rodriguez from Amakari Services interviews Trevor Fenton from Plain English Law.   
Recording Date: 16 Aug 2021  
Recording Length: 00:17:31 

 

+ - Podcast transcript
Hi there, this is Trevor Fenton from Plain English Law. We’ve made this series of podcasts by recording conversations between me and Dayle Rodriguez of Amakari Services. This is the second part of a two-part episode called ‘The Plain English Difference’. (You can find Part 1 on the Plain English Law website at https://plainenglish.law/podcasts/.) In Part 2 we break down what a ‘contract’ actually is – a business deal written down. I make the case for a ‘business first, legal second’ approach to contract writing, and share more examples of how to transform contracts from legalese to plain English. Let’s rejoin the conversation now... 
 
DR: Yeah, that makes sense. Do you mind if I ask you a very obvious question? A layman's question? 
 
TF: Not at all. 
 
DR: In terms of commercial law and types of documents drafted, are there a set list of documents that you would expect from a commercial lawyer to be able to do or provide? Or is it similar to other professional services where actually it's such a vast space that no one practitioner or even firm could deliver every single kind of agreement? 
 
TF: It is fairly vast, and yet there are – that sort of formula I just gave you of what a commercial contract looks like – it is literally just a commercial deal written down on paper. It's just a matter of how much detail you want to go into. The more complex the deal is, the longer the contracts can be. The more eventualities you want to deal with, the more risks you want to deal with, the more ‘what ifs’ you want to deal with, the longer the contract gets.  
A lot of these risks and ‘what ifs’ don't necessarily need to be dealt with in the contract, you know. The law often provides some sort of default positions, some default solutions to problems. It's just that sometimes people don't like those default solutions that the law provides, and so that's why they'll want to either make it clearer or have a different solution to those ‘what ifs’ in the contract. And they're free to do that, it's just that the more of that you do, the more of those things you cover off, the longer the contract gets, the more expensive it gets to draft because it takes longer.  
There are specialisms certainly within commercial law, no question – within contract law, I should say. I do commercial law which is sort of fairly general field of: I'm going to sell you this product or service, and so let's write down what the terms of that sale are going to be. Or I'm going to rent you some equipment, or I'm going to let you use my ballroom for your wedding, that kind of thing. Those are sorts of general business contracts. 
There are more specialised types of contracts, like construction, for example is a very good example of a contract that I generally would not handle. I certainly wouldn't draft one from scratch because there are all sorts of laws that apply specifically to construction and to repair work done on buildings and I just don't have that expertise. There are all sorts of solicitors out there that focus on construction law. So what I would do is I would recognise this is a construction issue, I have some understanding of the law around it, but not enough to be to be competent to draft this contract and give advice on it. So I'm going to refer this to a colleague that I know who is good with this stuff. 
 
DR: OK, that makes sense. 
Again, another layman question from me. A lot of business owners will try and save money by using template contracts. What are the pitfalls of using template contracts? 
 
TF: Well, one of the pitfalls is you end up with contracts that your customers hate reading, and they wonder: “What are you trying to pull? What are you trying to hide? Where's the trick in here because I can't understand this.”  
The other problem is there aren't a lot of contract templates out there that are necessarily ready to go for your business, you know. You need to be asking yourself: What is my proposition to my customer, or what is it that I'm trying to get from my supplier, or I've got a contractor who is developing intellectual property for me.  
For example, there may be a software developer who's building an app for me and I want to make sure that we know who owns what at the end of this. Now you can probably find a software development template contract out there, and yet there are very few relationships and business transactions that you will do that will absolutely fit one of those templates. And it's a little bit impossible to tell without discussing with the client how they want that relationship to work.  
It's impossible to tell whether one of these generic templates will work for them without some modification. And if you're doing it yourself you absolutely can take one of these templates, read it through and ask yourself if that's how you want things to work. 
One of the downsides is that many businesspeople just haven't seen that many contracts put together. They haven't seen that many different disputes that have come up, and so a lot of the thinking that goes into what should be in this contract does come back to: “What could go wrong here? And what could realistically go wrong here? And what are the realistic consequences if something goes wrong between me and my customer after we sign this contract? And what do I want the result to be if that thing goes wrong?” 
A lot of those discussions will be specific to your business and to your customer, to the customer relationships that you want to have, to the customer experience that you're trying to set up. And so no – no generic contract template will be able to capture that. You will have to modify it. 
The final thing I'll say is what about your brand voice? So when I mentioned the customer experience, if you're talking to a customer about and selling – you know, selling them on your product, your service, your brand, whatever it is you think about that journey that the customer takes as you bring them along towards deciding ‘yes, I want to buy from you.’ – they are having an experience and you're you are building your brand. You want that brand experience to be consistent. 
What happens if, after all of this lovely experience they fall in love with your products, etc., and they're ready to buy. And then you stick this ghastly document in front of them that's written in this awful prose that, compared to the tone of the conversations leading up to this, is suddenly changed. It's a jarring experience. 
Now sometimes your customer will just draw some breath and say: “Alright, of course, this is just the fine print. I trust this person. I trust this company. I'll just go ahead and sign.” But if they don't, how often are you going to know that was what it was all about? If they suddenly go silent? How often are you going to know what really happened? How often do you get to know whether it was actually the fine print that that made them go: “Oh, geez, I don't want to do business with people who do business like this.”  
Because remember that contract you're handing them – that is your business literally saying this is how we are going to do business with you. 
And if it's written like that, if it's written in unfair terms, with unnecessary and unfair rules, in an impenetrable language, you're sending a message to your customer that this is how I want to do business with you. It's not a good look. 
 
DR: Ok. So I'm going to try and summarise and ‘laymanise’ what you said, although to be honest it’s all pretty clear. Essentially, there's a misconception that legalese has to be put in legal documents to make it legally binding. That's not true, correct? 
 
TF: Not true at all. 
 
DR: And the purpose of a commercial contract. And I think this is how you explained it and you can correct me if I'm wrong: It's like an agreement between two parties for something they've already agreed in principle, and the idea is that they should be able to use that document as a reference and go back to should a dispute or disagreement arise. But that document should be so clear that if a dispute does arise, it explains who’s right and wrong? Have I got that right? What should happen in the case of a dispute? Is that correct? 
  
TF: Well it can do. I mean that's extra detail that you can add to a contract. Or you can simply rely on the legal default, right? We have a court system. We have systems for dealing with disputes. But frankly, they're very expensive to use, and if we're perfectly honest, you probably won't end up in court with your contract. 
What your contract really needs to do more than anything is help you and your customer defuse or resolve the dispute yourselves. Because that's the only efficient way of doing it. 
 
DR: Yeah, like you said: “You do this, I do that, this is what happens if it's not done, or this is what we agreed to do and this is within scope this is not within scope.” And then if you have that agreement, it's very clear what should and shouldn't be delivered, right? 
TF: If it's a clear agreement, because, as I said, all that the contract is, is the conversation that you had, it’s the agreement that you guys made up, you know, sitting around the table in the boardroom or negotiated at the pub. Wherever you negotiated this deal you came to, you said: “Yes, this is how we're going to work together. Now let's just write that down so that we've got a record of it.” All that a written contract is, is evidence of what you agreed. It's going to be either good evidence and helpful evidence, or it's not going to be helpful evidence based on how it's been written. 
So imagine if you are three years later, after you signed this contract, let's say we're talking about a shareholder agreement. So you have started a company with one of your friends or maybe one of your family members, whoever it is, but you've started a company together and you've started doing business together and you thought: “Let's sign a shareholder agreement first so we've got this down on paper about how we're going to manage this thing together.” Three years later, your business partner does something you don't like and you think: “Hey, that's not what we agreed.” So you go to your proverbial desk drawer and pull out the agreement and start reading it.  
Now, if this agreement has been written in terms that you don't really understand or that has long, confusing sentences or some ambiguous wording, then it's possible for you to read a sentence and come to a very different conclusion than your business partner about what that exact same sentence means. And each one of you, if you're in a dispute and you want a different outcome from each other, it's very likely that when you read that sentence, you're going to interpret it to mean what you want it to mean, and the other person is going to interpret it to mean what they want it to mean. 
A plain English, well-drafted contract will never be perfect. I routinely look at contracts that I've written in the past and think: “I think I've come up with a better way of doing that. I would write that differently today.” So contracts are, even a contract I consider to be really good from a plain English standpoint, can still have some things that I hadn't thought about when you first drafted it. So that happens.  
But you know what? What writing it in plain English does is, it makes it less likely, far less likely, that two people can read the same sentence and come to totally different interpretations of what it means. A more likely reaction is: “I don't like what you did.” so I pull out the contract, I read it and I go: “Oh, I forgot that we'd agreed you could do that. I guess there's no problem here.” or “Maybe we need to have a conversation because I'd forgotten I'd agreed that and it doesn't work for me anymore and I'd like to have a discussion. I'd like to see if we can update this.”  
That's a very different attitude and a very different approach from: “Look what that person did. They can't do that because the contract says X and I'm going to tell them they can't do that and maybe threaten to sue.” That's very different from: “Let's talk about this because this doesn't work anymore.” 
 
DR: It's a more productive way of doing business, right? There's less aggression, it's complementary.  
 
TF: And it just makes it less likely for conflict to spiral out of control, because that can happen, especially when emotions get into a business discussion, which happens lots. You know, something that started off with: “I don't like the way this is working” becomes: “I can't trust you” becomes: “You’ve done this to me on purpose.” People start digging their heels in – a poorly drafted contract can actually create a conflict that was quite avoidable. And most of the time when I see a contract that does that, it's because it's got some significant ambiguity in the way it's been drafted. 
 
DR: Thank you for explaining. Do you have any key point summaries or takeaways you want to wrap up with? 
 
TF: I think plain language builds trust. When you write things in plain language, people aren't left wondering what little trick you're trying to play. They're not looking for the ‘hook’, if you will.  
When you get a dense legalese document that's drafted by someone else's lawyer – I know from personal experience – that’s the first thing I wonder. I start looking through and wondering: “What am I missing here? What little things are going to come back and bite me later?” The plainer it's written, the less likely it is that the document will provoke that reaction. 
Also it means, let's say it's a customer contract, maybe it's terms of business on your website. Whatever it is, it's some kind of customer contract. The plainer it's written, the less likely your customer is going to have to call in and ask your call centre staff, ask your sales managers, ask any of your staff what this means. 
And I've seen it. I've seen it in businesses I've helped before where they've – I don't have measurements for it – but I've been told by a couple of former clients and employers that when we updated the contracts to be written in plain, much plainer, much briefer language, there was a noticeable reduction in the number of customer enquiries about what the contract meant. And that means you need fewer call centre staff.  
It also means there's less, there’s just a lot less potential for mistrust. People know that, essentially, it does what it says on the tin, and can rely on it. They can rely on their own reading of the contract without thinking that they might be missing something, and so that's good for the customer experience. And, ultimately, it's good for sales and reduces costs. 
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Transcript of Part 2 end
Revisit Part 1 here: https://plainenglish.law/podcast-the-plain-english-difference-part-1/
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