Simplified Contracts, Part 3

Editor’s Note: Today’s post is from Dick Locke, Sourcing Innovation’s resident expert on International Sourcing and Procurement. (His previous guest posts are still archived.)

Back in August I posted a blog suggesting that contract language should be tested for readability. I pointed out that it’s especially important for international contracts, because the chances for confusion are higher than when both parties are in the same country. (The original post Blogging on International Contracting, is in the archives). I suggested using your word processor’s grammar checker with “show readability statistics” turned on. The Microsoft Word grammar checker gives two figures: Readability (high scores are good) and required grade level (low scores are good). I suggested shooting for an 11th grade education level.

Then, in the same month, the State of Rhode Island said the same thing in a different context. The state is requiring health insurance policies to be written at an 8th grade level or lower. They suggested using the same readability checking tools, as I discussed in my post on how It’s Good to Have an Entire State on My Side.

Since then a couple more things happened.

On a personal level, my homeowner’s association asked me to sign a liability release that scored a perfect zero on readability. I balked, and in preparation for discussions with the association’s attorney I found this archive of Plain English columns from the State Bar of Michigan.

It’s a series of columns in a magazine aimed at lawyers that teaches the rudiments of good (and plain) English writing. The articles cover everything from the nuts and bolts of using Word’s grammar checker to examples of good and bad writing to suggesting a 10th grade standard. I’m glad to see that at least one state’s bar association is getting on board. It’s good ammunition if your attorneys balk at simplifying their writing.

Then I ran across this article on how to Test Your Procurement Skills (By) Find(ing) the One Word Death Trap over on The Vendor Management Office Blog. In it, Stephen Guth challenged readers to find the one word in a contract clause that made it useless. Full disclosure: I didn’t find it.*1 I was so irritated by the writing that I had trouble focusing on the content. The average sentence was 73 words long. It scored a 12 on reading ease and requires an astronomical 23 years of education.

Two thoughts: First, was this written by a supplier? It looks like it. Purchasing people should not be working from a supplier-written contract. Of course it does happen occasionally, but the buying company should be writing the contract for anything that it purchases frequently. Second, why should someone have to read this material? Shouldn’t a procurement department require contracts to be written in plain English?

I expressed these thoughts to Stephen Guth, the author of the blog, and he disagreed with me. He thought that a buyer who insisted on plain English would be whispered about, laughed at and/or fired.

Of course that is possible in some companies. But it’s all a matter of leverage and negotiating power. Certainly if high level purchasing execs are not supportive of a plain English effort, a buyer will have a difficult time. Certainly a purchasing department will have more leverage in some circumstances than others. The chances of success depend on the relative strength of the parties in the negotiation.

What to you think? Have any of you started to insist on clarity in your contracts?

Dick Locke, Global Procurement Group.

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*1 Editor’s Note: the doctor couldn’t find it either, which is to be expected since a PhD is only equivalent to 21 years of education. (12+4+2+3=21).