Anatomy of a written agreement

     Well drafted writtten agreements (including electronic records) include several components in addition to promises and conditions.  Concerning promises and conditions, see Commentary.Promises and conditions.  Professor Scott Burnham describes some of those components in S.Burnham, Drafting Contracts 220-30 (2d Ed Michie 1993), from which I draw some of the labels and drafting suggestions that follow.  The written agreement between the Cheetahs soccer team and Paula Fernandez, a soccer trainer (the "soccer agreement"), a form purchased from a stationery store and completed by the parties, provides a useful illustration.  For other sample clauses and contracts, see Sample Documents.

     In addition to relevant promises and conditions, the record of the agreement should include the following, as appropriate:

     1.  Title.  The soccer agreement bears a title "Agreement for Independent Contractor Services."  One may refer to this component as the title, the heading, or the description of the agreement.  A title is not necessary to the enforceability of the written agreement as a contract, but it is certainly useful as a reference and adds professional gloss.  Because this was a form agreement rather than a custom document, the title is generic.  In a custom document, the lawyer should strive to create a more specific title, one both more useful as a reference and an aid to interpretation.  "Agreement for Training of Girls Soccer Club" would be a more specific and useful description of the soccer agreement.       

     2.  Caption.  The first sentence of the soccer agreement is a caption.  A caption identifies the parties and the action that they are taking.   Written agreements sometimes identify parties in cumbersome ways, such as "party of the first part" and "party of the second part."  These phrases derive from some now musty, lost, or destroyed document drafted long ago whose language has been repeatedly and mindlessly copied.  Written agreements should instead identify parties in straight forward and logical ways and provide, in a parenthetical, a convenient and logical shorthand reference to each party that will be used uniformly throughout the remainder of the agreement.  The soccer agreement does this, but a custom document could profitably use tailored rather than generic parenthetical references.  "Los Robles Cheetahs (hereafter 'soccer club')" and "Paula Fernandez (hereafter 'trainer')," or "Los Robles Cheetahs (hereafter 'Cheetahs')" and "Paula Fernandez (hereafter 'Fernandez')" would be preferable to "Los Robles Cheetahs (hereafter "Client") and "Paula Fernandez (hereafter 'Contractor')."

     Captions frequently include a date, often stated to be the date on which the contract is "made" or "effective."  A date in the caption will usually be superfluous and can sometimes be confusing.  The important dates are the dates on which the agreement is signed and the dates on which events are to occur or promises are to be performed.  For example, the caption of the soccer agreement reads "effective May 1, 2000," but the agreement was not signed by the parties until July 15, 2000.  Moreover, each party may sign an agreement on a different date because all parties may not be physically present contemporaneously to sign at the same time.  The written agreement calls for the soccer trainer to begin training the soccer players in "mid-July" even though the facts of the dispute to which that agreement is relevant (Problem.Dispute.Soccer trainer) state that the Cheetahs and Fernandez orally agreed that Fernandez would conduct tryouts in May and begin training the soccer players at the beginning of July.  If dates were the subject of dispute, a court might well hold that the parties were bound to an oral agreement covering training during the first half of July (and perhaps to pay for conducting the tryouts) and a written agreement covering training and other matters beginning July 15.  To these facts the May 1, 2000 effective date in the caption only adds confusion.  To avoid confusion, omit any date from the caption.  

     3.  Recitals.  Parties to a written agreement will often be well served by a brief statement of facts in the agreement that provide background and context for the agreement and that suggest or state the purpose of the agreement.  This statement, often referred to as "Recitals," should follow the caption.   The recitals can provide a useful tool to help resolve later disputes about interpretation of the contract.  The soccer agreement, a generic form adapted to the circumstances, understandably does not contain recitals, and they are not necessary for the enforceability of the agreement.  For an example of recitals, read the recitals from a written agreement to settle a dispute about construction noise.  Then, draft recitals for the soccer agreement.   Recitals are sometimes drafted as a series of "Whereas" clauses.  You needn't draft recitals in that manner.   

     4.  Definitions.  Definitions of words or phrases used in the written agreement are often useful.  The soccer agreement does not include definitions.  Consider the definitions in a lease (together with recitals, for context) for an example. 

     5.  Closing.  A written agreement is closed by the signatures of the parties, the date on which each party signs, and, typically, the county or other location in which each party signs.  "Execution" of a written agreement is synonymous with "signing" a written agreement.  Do not confuse "execution" used in this sense with "executory contract" (meaning a contract as to which performance by one or more of the parties remains due) or "executed contract" (meaning a contract as to which performance by both parties has been completed), or similar uses of the root "execut" to refer to performance rather than signature.  You should be able to tell the difference in intended meaning from the context. 

     Individuals sign written agreements, but often do so in a representative capacity.  For example, a president or other authorized officer of a corporation will sign on behalf of a corporation  thereby obligating the corporation, but not the president or other signing officer, to perform the obligations of the contract.  In the soccer agreement, Ralph Towson signed "on behalf of the Cheetahs."  Because Cheetahs is the name of a soccer team, and because the girls on the soccer team are minors, it is likely that Ralph Towson signed with the implicit authorization and on behalf of the parents of the soccer players, obligating the group of parents collectively (also including Ralph if he is a parent of a girl on the team) to the terms of the written agreement.  In the soccer agreement, Paula Fernandez signed in her individual capacity, not in a representative capacity, obligating herself to perform the obligations of the contract.  If a party is signing in a representative capacity, it is important for the closing to clearly so indicate (as in "John Doe, President, XYZ Corporation") to avoid any later contention that the individual signing has obligated herself under the contract.   

     6. Other.  The soccer agreement includes four other paragraphs that are neither promises nor conditions.  Those paragraphs are entitled:  Independent Contractor; Entire Agreement; Partial Invalidity; and Governing Law.  The content of those paragraphs is precatory, expressing hopes for the manner in which the agreement will be construed by courts or taxing authorities in the event of dispute. 

     Should the Cheetahs withhold payroll taxes from the amounts payable to Paula Fernandez?  The tax law says "no" if Fernandez is an independent contractor.  The paragraph entitled Independent Contractor might help persuade taxing authorities on that issue, but taxing authorities (or a tax court) are not bound by the parties' self serving statement.       

     Will Fernandez be allowed to introduce evidence of an oral agreement (e.g. that the Cheetahs will pay Fernandez a $500 bonus if the team wins the national championship) to complement the terms of the written agreement?  Under the parol evidence rule, the merger clause (labeled Entire Agreement) is relevant but not controlling on that issue. 

     Will the unenforceability, invalidity or illegality of any portion of the agreement affect the remainder?  The Partial Invalidity term adds little if anything to the common law rule on that subject and in making a determination on that question the court is not bound by the parties' statement.

     Will the agreement be governed and construed in accordance with the law of Utopia?  If the contract was entered and is to be performed in Utopia, a court would apply the law of Utopia without the agreement of the parties.  If the contract was entered or is to be performed elsewhere, the court would not be bound by such an agreement if the transaction does not bear a reasonable relationship to Utopia. 

Some important writing suggestions

     Howard Posner, an appellate lawyer in Los Angeles, consults with other lawyers about writing.  He writes an occasional column in the California Lawyer, "Legalease," in which he offers extremely useful suggestions about word usage and editing.  The articles are brief, very instructive, humorous, and (not surprisingly) well written.  His suggestions apply to the drafting of contracts and to writing more generally.  One of the most beneficial things that you can do to become an effective writer is to retrieve these articles, save them, and take their admonitions to heart.  Here I summarize and give examples of his suggestions. 

     The preposition "by" may signal passive sentence construction that should be made active (as in "the dispute shall be resolved by an arbitrator" rather than "an arbitrator shall resolve the dispute").   The preposition "of" may create a verbose possessive (as in "the decision of the arbitrator shall be final" rather than "the arbitrator's decision shall be final").  Prepositions may create "tedious preposition sandwiches" such as "with regard to," "in connection with," or "with respect to." 

     Eliminate pointless and self-defeating repetition.  The writer may think that repetition emphasizes an important point.  Just as often, however, it fosters confusion by making the reader think that they misunderstood the first time.  The writer may think that repetition makes something previously expressed more clear or persuasive.  But the cure is not to repeat the point, but rather to rewrite the preceding unclear or unpersuasive sentences.  Repetition may creep in accidentally (as in "time-barred by the statute of limitations") or may be a cultural artifact. "Through" means "to and including," so "Does 1 through 20, inclusive" is redundant.  And common phrases using synonyms should be shortened by picking one and discarding the other synonym (as in "any and all," "cease and desist," "due and payable," "purchase and sale," "null and void").  

     "Defendants" will suffice in lieu of "defendants, and each of them."  "If" will suffice in lieu of "in the event that."  "Tell," "describe," or "explain" is more informative than "set forth."   "Before" and "after" are more concise and less pretentious than "prior to" and "subsequent to."  In a written agreement "the parties agree" suffices in lieu of "the parties expressly agree" and there is no need to say "the parties mutually agree."  "On" suffices in lieu of "upon."  "Under the contract" suffices in lieu of "under the terms of the contract" or "under the provisions of the contract."  "Various" is usually useless (as in "under various provisions of the contract").  "They amended the contract to correct the ambiguity" suffices in lieu of "they amended the contract in order to correct the ambiguity."  Finally, in argument, use the word "clear" or "clearly" sparingly.  If something is clear, the intelligent reader knows it and if something is not clear the intelligent reader will be insulted or skeptical if you claim the contrary.