Receiving accolades such as "my draftsman" from a partner at my workplace marked one of the most gratifying moments of my professional journey last year.
As a corporate commercial legal professional specialising in project finance, real estate and construction, and fintech, much of my focus in the past year revolved around contract drafting. In this article, I aim to discuss five key ways to enhance your contract drafting skills. The emphasis will primarily be on the form and structure of a contract, recognising that terms and conditions in contractual transactions significantly vary depending on the specifics of each deal.
- Attention to Detail: Meticulous attention to detail in contract drafting signifies professionalism. An illustrative incident involved a piece of information I received from an individual during a sale and purchase deal worth over half a billion Naira concerning 8 hectares of community land. All authorised signatories executed the agreement and accompanying title documents, except for one individual who was unavailable at the time. When I delivered the documents for his signature, he requested some days to review them before signing. Upon arriving on the agreed day after he had revised the documents and was ready to sign, he began to commend our efforts. He said in Yoruba language, “Eyin mo ise yin,” translating to “your firm knows its onions.” He then proceeded to inform me how he had refused to sign other similar deals on behalf of the community because the contracts were poorly drafted. “How could I sign a contract in which the amount in figures is different to the amount in words? Or can you imagine me signing a contract with my name wrongly spelt?” He complained to me. An oversight in such crucial details could jeopardise or significantly delay a transaction.Moreover, when utilising a template for new contracts, vigilance in updating pertinent details is imperative. While transactions might bear similarities, each demands meticulous attention to specific variations.
- Consistency: Ensuring consistency in document formatting — be it font type, size, line spacing, numbering, or language style (British or American English) — is paramount. Inconsistencies can reflect negatively on professionalism or suggest inadequate proficiency in document formatting tools.
- Clarity: A contract is a document of rights and obligations. And as a draftsman, one of the best ways you can serve your client is by stating clearly in the contract, the rights and responsibilities of the parties involved as agreed by them. A failure to present terms and conditions comprehensibly in the contract as agreed by your client and the counterparty denotes a disservice. Depending on the contract's complexity, employing tools like tables of contents, headings, tables, and schedules enhances clarity.For instance, I prepared a facilities management agreement (FMA) in which the objects of the transaction, that is, the operational services to be provided can easily be listed in the main body of the contract. On the other hand, I worked on a fixed and floating debenture from a company to a bank in which we had to list in a schedule to the debenture agreement all the company’s assets charged as security for the payment and discharge of the facilities provided. It was a long list. It would be revolting to list same in the main body of the contract.
- Define Terms: Define terms to ensure conciseness in your draft and avoid unnecessary repetitions. When preparing a contract, some terms are key to the transaction, requiring you to repeat them once or more in the contract. For example, facilities/services to be provided in the FMA mentioned earlier are crucial terms within the agreement. Similarly, in a joint venture or partnership agreement, the object of the collaboration serves as a key term. Hence, it is prudent to define those key terms in another word(s) from the outset of your draft, alongside defining other recurring terms.Further, strive to define terms with words that best describe them. Consider a fintech contract facilitating an International Money Transfer Operator (IMTO) licence cover for another company. Opting to define the licence with the word “Development” instead of using the word “Licence” might introduce ambiguity. It just doesn’t sound right.Exercise caution when defining identical terms using different wording. To illustrate, in a joint venture agreement between a landowner and a developer, you define the development of a parcel of land as the “Development”. You now proceed to define the “Building” also as the development of the land. The two different words ascribed to the same term can lead to confusion for any person reading or interpreting the contract. It’s a different case if you define the “Development” as the process of developing the parcel of land (i.e. the construction stage) and the “Building” as the final structure erected on the land.Finally, always remember to capitalise the first letter of the word(s) used in defining a term. It’s not unusual to find yourself having to use the word(s) you already ascribed to a term to describe another condition in the agreement. As an illustration, the following sentence – “The Facilities Manager shall provide the Services to the Client and shall not provide any other services except otherwise agreed by the Parties in writing.” – connotes that “Services” in the first letter upper case is the word used to define the term of the services which is the subject matter of the entire agreement while “services” in the first letter lower case is a new term introduced to the agreement in that clause.
- Review: After completing your draft, it's imperative to arrange for a competent individual to review it for spelling errors, grammatical mistakes, and other oversights. This reviewer can adeptly identify any errors you might have overlooked. In instances of urgency or a lack of immediate access to a reviewer, leveraging AI tools such as ChatGPT and Grammarly for proofreading is a viable option. Additionally, taking a brief break post-drafting to engage in a different task aids in refreshing your perspective, facilitating error detection upon revisiting the document.
