Rely on the most comprehensive, up-to-date legal content designed and curated by lawyers for lawyers
Work faster and smarter to improve your drafting productivity without increasing risk
Accelerate the creation and use of high quality and trusted legal documents and forms
Streamline how you manage your legal business with proven tools and processes
Manage risk and compliance in your organisation to reduce your risk profile
Stay up to date and informed with insights from our trusted experts, news and information sources
Access the best content in the industry, effortlessly — confident that your news is trustworthy and up to date.
Find up-to-date guidance on points of law and then easily pull up sources to support your advice with Lexis PSL
Check out our straightforward definitions of common legal terms.
Our trusted tax intelligence solutions, highly-regarded exam training and education materials help guide and tutor Tax professionals
Access our unrivalled global news content, business information and analytics solutions
Insurance, risk and compliance intelligence using big data, proprietary linking and advanced analytics.
A leading provider of software platforms for professional services firms
In-depth analysis, commentary and practical information to help you protect your business
LexisNexis Blogs shed light on topics affecting the legal profession and the issues you're facing
Legal professionals trust us to help navigate change. Find out how we help ensure they exceed expectations
Lex Chat is a LexisNexis current affairs podcast sharing insights on topics for the legal profession
Discuss the latest legal developments, ask questions, and share best practice with other LexisPSL subscribers
We’ve all been there. Rushing to get the deal done amidst increasingly fraught calls and emails between the client and other side.
Mistakes can happen when the pressure is on.
All too often commercial lawyers focus on making sure the contract they have drafted works well enough to get the deal through. However, transactional lawyers should not be afraid of putting on their ‘litigators hat’ well before the ink dries and terms are put to the test. Litigators often have to analyse contractual terms and wording when relations go sour.
So, understanding the principles of contractual interpretation are just as important to the transactional lawyer as they are to the litigator.
A recent Court of Appeal decision has re-stated the principles of contractual interpretation (Andrew Wood v Sureterm Direct Ltd & Capita Insurance Services Ltd). In this case, Capita Insurance Services Ltd acquired the entire shareholding of Sureterm Direct Ltd, of which Mr Wood was a majority shareholder.
In the sale and purchase agreement, the sellers agreed to indemnify Capita in respect of losses relating to the misselling of insurance products prior to the share sale. A dispute arose about that very point and the scope of the indemnity clause was called into question.
(Subscribers to Lexis®PSL can click here for the full version of the news analysis on this case.)
In his judgement, Clarke LJ set out some useful reminders of how the court will go about interpreting a contract. It is helpful for the commercial lawyer to bear these points in mind from the outset of negotiations and when drafting the contract itself:
So how can commercial lawyers ensure that their drafting is up to scratch?
Think: how will that clause or this wording work in real life? Pay particular attention to the boilerplate/miscellaneous provisions in the contract.
It is all too easy as a transactional lawyer to focus on getting the deal done, in doing so missing key points and exposing their client, their firm and potentially themselves to avoidable risk.
By their very nature, contracts cannot be completely watertight. However, as a bare minimum, the lawyer should look at each provision and ask: is this subject to risk, misinterpretation or ambiguity?
When a compromise is made during negotiations, consider the impact on both parties when drafting the provision. Discuss any risks and pitfalls with the client and ensure that a written note of those discussions, together with any advice given, is made.
Remember: clear and unambiguous language is key. Clauses should follow a logical pattern, headings should be clear and consistent, and the intention of the parties should be as clear as possible.
So what do you think? Do you have any useful drafting tips for our readers? Do let us have your thoughts below.
Free trials are only available to individuals based in the UK
* denotes a required field
0330 161 1234