MODULE 2[C]: ACHIEVING CLARITY IN

YOUR CONTRACT: WORD GAMES

1. INTRODUCTION
 Contracts are documents of prospective Nature.
 This means that unlike other legal documents that govern and look upon the past actions
of the parties, a contract looks upon the future course of action to be undergone by the
parties.
 A good Contract guides the future commercial behavior of the parties.
 The goal when drafting contracts should be to draft everysentence with precision such
that only one possible interpretation follows—theinterpretation the drafter intends.
 Any sort of ambiguity whatsoever must be avoided in a contract in order to prevent future
ambiguities.

2. POINTS TO PONDER

The following points must be strictly adhered to while drafting a contract or even revisiting the
draft:

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 Plain Use of Shall
Use of May
English and Will

Short Active Voice

Sentences & Core

1. The English used must be plain:

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 In a contractual document or for that matter in any legal document, care must be given to
the use of language. The Document should contain plain English rather than verbose
legalese terms. Avoiding legalese makes the contractreadable to all audiences including
the parties themselves and a judge who could interpretthe document later on.
E.g., “Seller has not entered into any other contract or agreement to sell orencumber the
Property or any part thereof.” Here, “its” can replace “thereof.”This sentence can be
rewritten as “Seller has not entered into any other contract oragreement to sell or
encumber the Property or any of its parts.”
2. Use of Shall and Will:
The use of the words “Shall” and “Will’ must be correctly used by the Drafter, as they
play a significant role in determining the extent of obligations over parties. We use
“shall” when referring to an obligation to be completed by aparty. If a party does not
precede the word “shall,” then “shall” has probably been usedincorrectly. Use “will” to
establish future consequences of events and circumstances thatdo not obligate the parties.
E.g., “Seller shall reimburse Buyer for all delivery fees.”
E.g., “This Agreement will be governed by the provisions of the Indian Contract Act,
1872.”
3. Use of May:
Akin to “Shall” and “Will”, the term “May” should also be used very carefully. The word
“may” is usually read in a manner so as to mean permissive or discretionary unless the
contextindicates otherwise. The Drafter can use the word “may” as the auxiliary verb in a
statement permitting,but not obligating, a party to act in a particular way. “May” can be
thought of asreplacing the phrase “reserves the right to.”
E.g., “For as long as Rohan has a fifty-percent stake in the company, hemay appoint one
director to the board.”
4. Use of Short Sentences:
One must note that Short Sentences have the power to make the contracts “MORE
READABLE” or “READER FRIENDLY” and prevents losing of interest by the parties

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 or the readers. One must take it as a thumb rule that “If a sentence is longer than three
lines, it must be broken down into two smaller sentences.”
5. Using Active Voice and Keeping the Content Together :
Every Legal Document including a contractual agreement should be written in an Active
Voice. This is so because Active Voice is easier to understand and better to read. It is
most of the times preferred over passive voice. However even when using Active Voice,
the CORE of the sentence must be kept together. Core means Subject, verb and object. A
scattered core is always difficult to understand. Try to avoid creating a break between the
subjectand verb or between the verb and object with clauses and phrases.
E.g., “Ten days prior to Closing, Borrower shall furnish an updated and currentRent
Agreement.” In this sentence, the active voice is used, and the “core” is kepttogether. The
subject (“Borrower”), the verb (“shall furnish”) and the object (“anupdated and current
Rent Agreement”) all next to each other.
E.g., “Ishika may not, without the prior written consent of Madhav Industries, transfer the
Shares to any Person.” In this sentence, “without the prior written consent of Madhav
Industries” creates a break between the subject “Ishika” and the verb “transfer.” This
sentence can be rewritten as: “Ishika may not transfer the Class A Shares to any Person
without the prior written consent of Madhav Industries.”
6. Cautions with respect to Modifier Placements:
A modifier is a verb or a phrase used in a sentence to change the meaning of the other
part of the sentence. The use of Modifiers is very common in contractual agreements.
However it should be noted that such modifiers can increase the complexity of the
sentence when used immediately after or before compound sentences. A reader of a
contract may be confused about whether the modifier applies to all items inthe compound
phrase or series or only the item closest to the modifier. Make sure whendrafting that it is
absolutely clear what items the modifier actually modifies. Usingcommas can help fix a
potential ambiguity.
Eg., “No litigation against the Seller is pending or, to the knowledge of the

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 Seller, threatened.” In this sentence, the commas help make clear that the modifier
“to the knowledge of the Seller” only modifies litigation that is “threatened,” and
does not modify litigation that is “pending.”
7. Verbs should not be Buried:
Abstract Nouns SHOULD not be used in a manner so overwhelming that they start
replacing or covering up the verbs in the sentences.
Eg. ,“Immediately following the termination of the contract” can be rewritten as
“Immediately after Mr. Mehra Terminates the Contract.”
8. Maintaining Consistency in words:
It is not denied that a literature person plays with words. However a legal professional
drafting a contract MUST NOT do that and should avoid inconsistency of words
wherever possible.
E.g.,If you refer to the subject matter of a sales contract as “goods,” use the sameterm
throughout the contract to refer to that subject matter instead of calling it“items” or
something different.
9. Avoidance of Gender Specific Terms:
Gender-specific language may mislead, distract, or offend some readers. You can avoid
using gender-specific language by using a pluralnoun or repeating the noun. One may
also separately used every gender by separating them with “/” mark.
E.g., “Directors will not receive compensation for their services.” This sentenceavoids
gender-specific language by using the plural noun “Directors.”
E.g., “The Executive Director will not receive compensation for the ExecutiveDirector’s
services.” This sentence avoids gender-specific language by repeatingthe noun
“Executive Director.”
10. Effective use of Sections and Sub- Sections:
A contractual document can easily be made comprehensive and yet easy to understand by
appropriately using the Sections and Sub- Sections. Shorter Sections make a Contract
easy to read and understand. A provision can be broken up into smaller parts by drafting

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 a general heading for the section and drafting more specific sub-sectionheadings.
However the drafter must be sure that the headings given to the sections and sub-sections
correctlydescribe and apply to that entire section or subsection’s contents.
E.g., In a provision about the company’s officers, the section heading could read“The
Company’s Officers” with sub-sections titled “Appointment of Officers,”“Approval of
Officers,” and “Indemnity of Officers.”

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