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A comprehensive contract might not be worth the expense

This past week I had to review and mark up a draft software development agreement for a client. It was a thing of beauty: Densely printed in single-spaced, 10-point type, using complex sentences in long paragraphs, it covered scores of contingencies in remarkable detail. It may have been THE most compre­hensive such agreement I’ve ever seen.

The agreement’s very comprehensiveness, though, cost my client a good deal of money. I had to spend a not-inconsiderable amount of time carefully reviewing the language to make sure its complexities didn’t mask any unpleasant surprises. That was a shame, because —

  • most of the concepts covered by the agreement could have been stated far more succinctly;
  • most of the contingencies it planned for were unlikely ever to occur;
  • if the contingencies ever did occur, the parties probably would try to handle them on a business basis.

I was reminded of the article I read several years ago about the Pathclearer approach developed by in-house counsel at a UK brewery. The approach involves using short letter agreements instead of long, complicated contracts, and relying on commercial motivations and the general law to fill in any gaps that might be left.

I’m hoping the TATE Compendium can stand on the shoulders of the Pathclearer approach, using short, understandable, “Lego-block” clauses to help cut the time and expense of drafting and reviewing contracts, even complex ones.