Drafting techniques and contract language
Drafting techniques and contract language

The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:

  • Drafting techniques and contract language
  • The fundamentals of good drafting
  • The document—using a template
  • Clause construction
  • Definitions
  • Common expressions
  • Contractual construction and interpretation
  • Practical drafting tips

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:

  1. legally enforceable

  2. clear

  3. well-organised, and

  4. 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 active verbs often convey more information and are easier to follow.

For example, 'when the Agent has confirmed the conditions' is better than 'when the conditions have been confirmed by the Agent'.

An active voice is not necessarily better in all circumstances and it is important to consider the emphasis of the statement. For