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Reasons Not to Hire Me to Help You with Your Contracts

I divide my time between giving seminars and helping companies upgrade their contract templates. Here are some reasons why you might not want to hire me for the latter service.

“Our templates are great.”

Actually, it’s likely that in terms of what they say and how they say it, your templates are somewhere between a train wreck and in need of significant help. That’s the case no matter exalted your company. But there’s a quick way to give your templates a stress test: I’d be happy to give you some general comments at no cost.

“Our templates are good enough.”

We’re all familiar with the idea of making do. But I suggest that when it comes to your contract templates, it’s shortsighted to skimp—they’re too important. Besides, you might not be equipped to assess your templates objectively.

“We can handle the job ourselves.”

I’m sure you can, but probably nowhere near as well as I can. That’s because you and your colleagues have day jobs. I don’t—I’m one of that elusive breed, a contract-drafting specialist. (See this blog post for more about what I mean by “contract-drafting specialist.”)

“We’ll get our outside counsel to do it.”

Generally, law firms are in the business of getting the deal done. They’re driven by expediency—making contracts clearer and more efficient isn’t a priority. And even if it were, it’s unlikely that a law firm would be equipped to make that happen. And they would presumably charge a nontrivial amount of money.

Of course, there are exceptions. If your outside counsel has done good template work for you, consider yourself fortunate. But experimenting with a law firm instead of hiring me? Color me dubious.

“Fixing our templates wouldn’t be that complicated.”

Actually, my writings all go to show that expressing transactions in contracts is in fact complicated and that you need more than good intentions to do the job effectively. For a cautionary tale, see this blog post about GE Aviation’s template initiative.

“We can’t afford you.”

Compared with the drain on time and resources caused by dysfunctional templates, my fees are modest. Besides, the only way to determine whether you can afford my fees is to ask what I’d charge.

“We don’t have time to fix our templates.”

You might not, but I do. And if you put me in charge of the process, you’d get it done way faster than you would otherwise.

“We can’t handle the change involve in overhauling our templates.”

Yes, change is hard. But the pain in short-term; you quickly start reaping the rewards. And I now work with clients to figure out what change is required, so it comes as less of a shock; see this blog post.

“It’s not in our interest to be seen as not up to the task of fixing our contracts.”

I get it—you think that bringing in an outsider might be seen as a sign of weakness. But it’s no more a sign of weakness than calling in a plumber is a sign of weakness. You know what really is a sign of weakness? Crappy templates.

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Geneva “Drafting Clearer Contracts” Seminars on 9 and 10 April 2018

I’m pleased to announce that on Monday, 9 April 2018, and Tuesday, 10 April 2018, I’ll be back in Geneva, Switzerland, to give “Drafting Clearer Contracts” seminars. My host will be the Geneva office of the global law firm Orrick.

The Geneva seminars are always fun: beautiful premises, a small group (no more than 14 people), a particularly civilized lunch …. I hope to see some of you there. For full details and registration, go here.

And I’m currently exploring adding other seminars elsewhere in Europe. If you’d like to discuss having your organization host a public “Drafting Clearer Contracts” seminar in return for having your personnel attend at no charge, contact me. Companies that have acted as host include Maersk Line, SAP, and ABB.

(I snagged the photo from the website promoting Geneva tourism. I thought they wouldn’t mind; if I’m mistaken, let me know.)

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If the Expectation Is That Your Lawyers Understand Your Contracts Better Than the Business People, Something’s Wrong

I routinely encounter the assumption that lawyers understand contracts better than others, and that the challenge is for lawyers to help everyone else by making contracts clearer. For me, that sets alarm bells ringing.

Consider this in terms of my usual framework, which divides contract drafting into the tasks of determining what you say and determining how you say it.

What You Say

As regards determining what you say in a contract—in other words, determining what the deal is—the purely legal part of contracts consists of (1) figuring out any legal framework (whether derived from caselaw or statutory law) that applies to the transaction and (2) establishing the rules for resolving disputes. (For more about that, see this 2011 post.) I assume that in most transactions, the business part occupies more attention than the legal part. But whatever the imporance of the legal part for a particular deal, the business people have to understand what’s going on. So if in fact only the lawyers understand the entirety of the deal, something is amiss.

I expect that some of you might be thinking, Wait, clients are only too happy to leave some legal stuff to lawyers! A popular candidate for that would presumably be the limitations-of-liability provision. But I would award the limitations-of-liability provision the prize for least-understood boilerplate: I have the sense that most deal lawyers have only a tenuous grasp on what they’re trying to accomplish with that litany of consequential losses, indirect losses, etc. (I discuss this in my recent post about GE Aviation’s template initiative, here.) I offer the following hypothesis: if clients are willing to consign something to the lawyers and wash their hands of it, it’s because lawyers have bollixed it.

How You Say It

I suspect that most of those who feel that lawyers should make contracts clearer are referring to the how-to-say-it part of contract drafting: that the difficulty lies not with the deal but with how the deal is expressed. That concern is justified. But it’s not that in expressing the deal, lawyers are able to call on inscrutable skills. Instead, the problem is that traditional contract language is a semiliterate stew of archaisms, redundancies, random verb structures, and a host of other glitches.

Furthermore, it’s not as if lawyers are somehow equipped with a magic wand that allows only them to make sense of traditional contract language. Instead, some accept it—are co-opted by it—because it’s all they know. Others might be aware of the dysfunction, but they’re trapped in the copy-and-paste system. Either way, lawyers too pay a price for the shortcomings in traditional contract language.

The Upshot

So if there’s a sense that your lawyers understand the deal better than the business people, either your lawyers aren’t doing a good job of explaining the legal component of your transactions or they’re expressing the deal in the dysfunctional prose that characterizes traditional contract language. You might want to do something about that.

And more generally, it would be for the best if lawyers were to loosen somewhat their grasp on contracts, so that contracts are more clearly recognized as the responsibility of different constituencies.

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What Kind of Change Should We Seek in Contracts?

I noticed that Tim Cummins, head of the International Association for Contract & Commercial Management (IACCM), mentioned in this post on his blog my recent post about GE Aviation’s template initiative (here). I’m pleased that Tim thought it worth his time to read it. Three thoughts:

Some Stuff Is Complex

Tim again lumps me with traditionalists, saying, in referring to me, “he also bows to traditional thinking when he suggests that because contracts deal with complex matters, they must therefore themselves be complex.”

Generally, Tim should ask some traditionalists what they think of my writings. No bowing is involved! Just to be clear, I don’t say in my post that all contracts must be complex. Instead, I say that contracts are necessarily as complex as the transactions they express, and plenty of transactions are complicated, so it’s unrealistic to expect that you can make all transactions, and therefore all contracts, simple enough for a high-school student to understand. I think that’s a pretty mild statement to make, and I arrived at it based on my own experience. I’d be interested to hear what others think.

Could transactions be simpler? Doubtless. But you have to distinguish complexity from obfuscation. We live in a complex world, and some transactions have complexity baked into the deal terms. It’s not something grafted on by cunning lawyers.

Why Obfuscation Persists

Tim suggests that obfuscation in contracts is a result of the legal profession’s tendency to operate as a guild rather than a competitive market. I’m willing to believe that’s a factor, but another powerful force is simple inertia.

Contract drafting currently relies on what I call “passive drafting”—you draft contracts by copying, on faith, from precedent contracts of questionable quality and relevance. Incoherence in a contract can get endlessly replicated without any venality on the part of the drafter. Improving your contracts requires dismantling and retooling them. That’s challenging if the deal machinery is whizzing around at a thousand revolutions per minute.

What’s the Fix?

Like me, Tim is eager to rid transactions of the dead weight of traditional contract drafting. But he wants drastic change, whether it’s in the form of “emojis, text-talk, graphics and videos” or (according to this 2015 post) “programmable contracts.” For most of the transactional world, those solutions are unrealistic to the point of being irrelevant.

That’s why I aim for something more practical but nevertheless revolutionary:

First, draft contracts using prose that complies with a comprehensive and rigorous set of guidelines. (I wrote A Manual of Style for Contract Drafting with that in mind, and I think it now fits the bill.)

And second, create a library of automated, customizable, and annotated templates of commercial contracts, so people have a convenient and cost-effective alternative to passive drafting. With a curated set of templates, you could address many different deal scenarios; you could strike a suitable balance between explicating the deal and achieving party objectives, on the one hand, and legalistic risk-aversion, on the other hand; and you could ensure that clear, concise, and consistent prose is used throughout.

Let’s see how that second task goes.

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What Does Glenn West Mean When He Says You Should Make Sure Your Contracts Say What You Meant?

I find it convenient to divide the world of contract drafting into deciding what you want to say in a contract and deciding how you want to say it. They’re not distinct tasks, but rather two ends of a spectrum, with blurring in the middle, because how you say something can unexpectedly affect meaning.

I focus on the how-to-say-it part, with occasional forays into boilerplate topics like governing law, force majeure, and indemnification. A savvy commentator on the what-to-say part is Glenn West, a partner at the law firm Weil. (That’s him in the photo.) Glenn has written about many deal issues; I’ve mentioned him in a bunch of blog posts.

So I of course checked out his most recent post on Weil’s Global Private Equity Watch blog. The title is A New Year’s Resolution for Deal Professionals: Make Sure Your Written Deal Documents Say (And Will Be Interpreted to Mean) What You Meant. In it, Glenn points to recent court opinions reinforcing the notion that courts interpret contracts to mean what they appear to say, not what you might have thought they say.

That’s a worthwhile reminder, but it raises a big question. Yes, you should make sure your contracts say what you mean, but no sane and sober drafter ever says to themselves while drafting a contract, I’m going to make sure this contract doesn’t say what I mean! Instead, any disconnect between what you say in a contract and what you mean will be inadvertent.

So “Make sure your contracts say what you meant” is an invitation to a conversation. Acting on it requires guidance. Glenn isn’t in the business of providing that sort of guidance. Mastering the how-to-say-it part of contract drafting requires devoting endless hours to a worm’s-eye view of contract language. No one with a day job, and certainly no titan of BigLaw, has time for that.

When Glenn tells you that you should make sure your contracts say what you mean, in effect he’s leaving you at the gates of the how-to-say-it world. While you’re there, you might see me frantically waving, trying to catch your eye.

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Where in a Sentence Should You Place an Exception? (Plus Observations on the Nature of Contract Language)

I noticed an exchange between D.C. Toedt and Bryan Garner. Because it allows me to address a moderately interesting issue, namely where in a sentence you should put an exception, I permit myself to wade in.

The starting point is this article by Garner in the ABA Journal. Here’s the gist of it:

Keep in mind two principles for creating readable prose: (1) A fair percentage of sentences should begin with short contextualizing phrases, often adverbial. (2) A fair percentage should begin with one-syllable transitional words—normally But, Yet, So or even And.

This advice is entirely standard and unobjectionable, but it has no bearing on contracts. Bryan’s audience is lawyers who are “professional rhetoricians.” That doesn’t include contract drafters: contracts aren’t the place for telling stories or persuading.

Nevertheless, in this post on his blog, D.C. uses Bryan’s article to make this point about contract drafting:

In a contract, it’s less important for the writing to pack a punch than it is for each sentence to make its point quick­ly, precisely, and under­stan­d­ably, so as to help speed up legal review and get the contract to signature soon­er. And that will usually call for the kind of boring, just-the-facts-ma’am style — Alice will do X, Bob may do Y — that Garner urges writers to avoid.

But in applying to contract drafting Garner’s points regarding rhetorical style, D.C. is comparing apples and oranges: it makes no sense. But D.C. avoids facing that because he includes no examples.

Bryan responded with this tweet. In addition to pointing out that D.C. had offered no examples, he says this:

The principle of end weight—putting emphatic words at the ends of sentences to avoid syntactic fizzle—applies almost as strongly to contractual drafting as in other expository prose.

So now Bryan too is comparing apples and oranges. This general proposition leaves me flummoxed.

But Bryan’s tweet includes this photo:

Ah, now we’re getting somewhere! The two examples in this photo don’t address some general point of syntax or rhetoric. Instead, they address a narrow issue: where in a sentence you should put an exception!

Where you put exceptions shouldn’t be a function of emphasis. Emphasizing one part of a sentence over another is at odds with the nature of contract language: it’s analogous to software code, so everything matters.

The primary concern should be avoiding confusion. Consider “Ex. 1” in Garner’s photo. Putting the exception at the end arguable creates syntactic ambiguity: one could get into an argument over whether the exception applies to everything that precedes it or applies to just “free from all tenancies.” If you put the exception at the front, you avoid that uncertainty. So that’s what I recommend: if your exception applies to the entirety of the rest of the sentence, putting it at the front should serve to avoid such confusion. (But in some contexts opening modifiers can result in confusion; see MSCD 12.23.)

You might be able to improve on my analysis, but I feel that I’ve at least salvaged something specific from an exchange that was going nowhere.

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Rethinking Your Templates Instead of Just Redrafting Them

In this post I critique Shaw Burton’s article in the Harvard Business Review in terms of the guidance it offers on making your contracts clearer. But it also offers a useful reminder of the benefits of overhauling your templates top to bottom.

Usually when I work on a template for a consulting client, I start by redrafting their version of the template. But that can result in two problems. First, it’s rare that a template’s problems are limited to how it says what it says. Instead, it’s usual for templates to include both dysfunctional language and dysfunctional content. Redrafting dysfunctional content can be a waste.

And second, when I give a consulting client my version of their template, I’m asking them to accept a lot of change. That’s something I discuss in this post.

A different approach would be along the lines of that adopted by Shawn and his team at GE Aviation: You revisit the basics of the transactions in question, perhaps using the existing template as a starting point but nothing more. You consult all relevant constituencies. You build a bullet-point framework, then you gradually flesh it out. That way, you’re not simply perpetuating whatever’s in the current template. And because change is accomplished step by step, it’s not as alarming as change that’s dumped on you all at once.

But a complete overhaul takes time, and it takes your personnel away from other projects. Shawn describes his initiative as “a three-plus-year effort.” That might not be exceptional: a seminar client recently told me that they spent 18 months redoing one of their templates. I suspect that such projects take a long time because those involved aren’t contract-drafting specialists (see this post for what I mean by that) and because they’re juggling other responsibilities.

Put me in charge of such a project and I’d get it done in perhaps a quarter of the time.

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Optimal Contract Language Requires More Than Enthusiasm: My Critique of Shawn Burton’s Article in the Harvard Business Review

Just in time for Christmas, the January–February 2018 issue of the Harvard Business Review offers us a lump of coal in the form of an article entitled The Case for Plain-Language Contracts (here). It’s by Shawn Burton, general counsel of GE Aviation’s Business & General Aviation and Integrated Systems businesses. It describes “a three-plus-year effort to promote plain-language contracts at GE Aviation’s digital-services business.” That effort started in 2014.

Flawed Approach

The premise is unobjectionable: “For the most part, the contracts used in business are long, poorly structured, and full of unnecessary and incomprehensible language.” Sure, using clearer language in contracts allows you to save time and money, be more competitive, and avoid assuming unnecessary risk. And no doubt overhauling the contracts used by GE Aviation’s digital-services business yielded many benefits. But as a guide to how to make business contracts clearer, this article ill-informed.

First, the article is unrealistic in the standard it sets: “If a high schooler can’t understand the entire contract, it ain’t good enough.” Contracts are necessarily as complex as the transactions they express, and plenty of transactions are complicated. Perhaps the transactions that GE Aviation’s digital-services business enters into could indeed be understood by a high-school student, but it’s misleading to suggest that that standard could be applied broadly. I discuss that in this recent blog post. Furthermore, it appears that the resulting template clearly flunked the high-school-student test in at least one respect, as I discuss below.

Second, the article lumps risk assessment and relevance in with clarity. The starting point for Shawn’s initiative was seven templates. The average length was 25 pages; the longest was 54 pages. Boiling them down to one five-page contract must have involved cutting provisions wholesale. That goes beyond saying stuff clearly.

And third, Shawn’s approach is that of someone who hasn’t been immersed in commercial contracts. (Until he became GC in 2013, he worked in labor and employment.) The article mentions by way of background plain-language initiatives that have nothing to do with contracts. And it appears from this GE report that for guidance, Shawn consulted authorities on general legal writing, presumably works such as Richard Wydick’s Plain English for Lawyers:

Burton [then general counsel of Digital Solutions] harked back to his law school days when he studied Plain Language, a way to condense the written word to the clear basics. He dusted off his textbooks and, with the help of his GE language commandos, used it to write a new contract.

That’s not promising. Contract language is limited and stylized, and often a lot is at stake, so contract language is subject to considerations very different from those that apply to, say, litigation writing and memo writing. Furthermore, I can think of a handful of directly relevant works Shawn could have consulted. (Let’s not be coy—what I really mean is that he could have consulted A Manual of Style for Contract Drafting.)

Flawed Execution

Shawn’s naiveté is on display in the examples of the reworked contract included in the article. Here’s one sentence, described in the article as “containing 13 very understandable words”:

During the contract term, we will comply with all of our legal obligations.

Leaving aside use of the first person and, it follows, use of will to express obligations, I suggest that “During the contract term” is expendable: unless it’s specified otherwise, a contract provision necessarily applies only during the term of the contract. (For more on that, see MSCD 13.254 or this 2007 blog post.) And “all of our legal obligations” appears to be an awkward way of saying you’ll comply with the law. For one thing, the word obligations is so associated with contracts that some readers might assume that this sentence refers to contract obligations.

Here’s another “after” extract:

Your and our total compensation obligation under this contract cannot exceed twenty-five percent of the amount FES has billed you in the last twelve months for the applicable service, and neither of us have any compensation, contribution or other obligation for consequential, punitive, incidental, indirect or exemplary losses (including, but not limited to, profit or revenue loss, capital costs, replacement costs and increased operating costs).

It raises a number of questions:

  • “Your and our total compensation obligation”? What a wretched buried-verb combo! See MSCD 17.7. Say instead something like “Neither of us is required to pay”.
  • Does “Your and our” mean that the limit applies to the aggregate of the, uh, compensation obligation of both parties? Or does it apply to each party’s compensation obligation considered separately?
  • Why “cannot exceed”? The word cannot expresses physical or mental inability; that’s out of place here. See MSCD 3.293. As always, the question is, What category of contract language should this be? See MSCD chapter 3.
  • Why use words to state these numbers? See MSCD 14.1.
  • So the GE Aviation entity is referred to using both “FES” and the second person (“our”)? A basic rule in contracts is that you shouldn’t say the same thing two different ways, as that invites confusion and gives the reader more work to do.
  • Using “including, but not limited to,” is a bad idea. See MSCD 13.353 or my recent article with Vice Chancellor Laster of the Delaware Court of Chancery, When Contracts Seek to Preempt Judicial Discretion (here).
  • Regarding “consequential, punitive,” and so on, any high-school-student exposed to that would be rendered a gibbering wreck. Such limitation-of-liability incantations are a strong candidate for most-misunderstood contract provision, commercial-contracts category. I recommend doing something different. See MSCD 13.161 or this 2010 blog post. Shawn’s article says that the law firm Weil vetted the new template; it so happens that Glenn West, a Weil partner, is author of the article on the pitfalls of the standard “consequential damages” litany (here).
  • Black’s Law Dictionary says “exemplary damages” means the same thing as “punitive damages”: why include synonyms in the litany?

Here’s the third “after” extract:

If an arbitrator finds that this contract was breached and losses were suffered because of that breach, the breaching party will compensate the non-breaching party for such losses or provide the remedies specified in Section 8 if Section 8 is breached.

It raises the following issues:

  • The “after” version is described as “clearer and much more concise.” That’s not so—instead, it’s entirely different! The provision it replaces is a clunky indemnification provision that in effect says that the customer will be liable if various matters arise, regardless of whether the customer was somehow at fault. The “after” version just says that the breaching party will be liable for breaches.
  • Why bother saying that that the breaching party will be liable for breaches? That’s the way contract law works, whether or not you say so in a contract.
  • Use of the term “non-breaching party” can have unintended consequences. See MSCD 2.123.
  • Using such instead of those is a hallmark of dysfunctional traditional drafting. See MSCD 13.179.
  • Using a capital S in the word section in cross-references is inconsistent with the recommended practice in general English usage. See MSCD 17.34 and The Chicago Manual of Style.

Significance

The moral of this story is that optimal contract language requires more than enthusiasm. “Better” is easy; “best” requires serious application. If that weren’t the case, I’d feel a bit of a chump for having devoted much of the past 20 years to researching the building blocks of contract language.

This isn’t the first time I’ve encountered a company that has ingenuously patted itself on the back for having overhauled a contract. See this 2014 blog post for my critique of IBM’s cloud-services contract, which had been rolled out with some fanfare. On rereading that post, this caught my eye: when it comes to contract language, “If you’re not a specialist, you’re a dilettante.”

So I find myself in the unusual position of taking issue both with traditionalists (most recently in this post and this post) and with people who think they’re at the forefront of the push for clearer contracts. In both contexts, my message is the same: contract language is tricky, and a lot is at stake, so for optimal contract language you need standards.

That I’m the author of the only comprehensive set of guidelines out there—A Manual of Style for Contract Drafting—doesn’t mean I’m writing this in a fit of pique. Promoting one’s ideas requires pointing out the shortcomings in other ideas, particularly when they’re broadcast from atop a soapbox as prominent as the Harvard Business Review.

(This isn’t the first time I’ve written about GE Aviation’s effort; see this blog post from earlier this year.)

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Who You Gonna Trust?

I used to use King Arthur organic all-purpose flour for all my baking. Now I use King Arthur only for bread and pizza; for cakes and pastries, I’ve switched to Gold Medal all-purpose flour. Why? Because Stella Parks (@BraveTart) recommends Gold Medal. When it comes to baking sweet things, what @BraveTart recommends, I do, with a salute and a smile on my face.

That’s because Stella is a baking expert, and I’m not. I wouldn’t dream of attempting to replicate the years of research and experimentation that have made her an expert. Instead, I happily rely on Stella’s expertise, although I don’t expect her to be infallible. What convinced me to rely on Stella? Her impressive book, BraveTart: Iconic American Desserts. Her posts at Serious Eats. The success I’ve had in following her recipes. And her fun Twitter feed.

We might not always be aware of it, and it might be out of fashion in some circles, but we rely on experts all the time. We have finite amounts of time, energy, and talent to expend in our lives. We’d rapidly run dry if we aren’t willing to rely on experts.

That of course applies to contract drafting. The whole copy-and-paste engine reflects that building contracts from scratch for each transaction doesn’t make sense and wouldn’t be possible. But with each act of copying, you’re relying on someone.

When you copy something you’ve found online, you’re relying on … well, who knows who you’re relying on. At best, you’re relying on an institution’s reputation. This is an Acme contract! Acme wouldn’t have crappy contracts, would they? Well, actually, they would: I’ve shown time and again that BigLaw contracts and global-company contracts are reliably dysfunctional.

Even if you use a contract prepared by your law firm or law department, it might not be clear who you’re relying on, given that precedent contracts morph over time. The starting point might have been a contract from outside your organization, with further adjustments being made from transaction to transaction.

What if you’re using a contract template offered by a commercial service? You’re likely relying on an unnamed refugee from BigLaw, doing their BigLaw thing. That’s not particularly promising.

When it comes to individual usages, who are you relying on? When during my seminars I ask participants about the implications of a particular usage, usually those who offer their views are hazy as to the source. Someone once told me … I’ve heard that … To rely on conventional wisdom is to rely on no one.

My livelihood is based on my having decided twenty years ago that as regards the building blocks of contract language, no one was authoritative enough for me to be willing to rely on them. Since then, I’ve worked to make myself someone you would be willing to rely on.

What factors might be relevant? Your experience with MSCD? The general reputation of MSCD? My blogging? My marketplace-of-ideas smackdowns? What others say about me? The fact that I do seminars around the world? The shortcomings of other commentators? All that’s for you to decide.

In any event, I hope you’re willing to rely on me as an authority on contract usages just as I’m willing to rely on @BraveTart for purposes of baking cakes and pastries.

The post Who You Gonna Trust? appeared first on Adams on Contract Drafting.

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“Compensation” Versus “Remuneration”

Today I tweeted the following:

It prompted the following tweet from the redoubtable @IPDraughts:

Because tackling this requires more than 280 characters, I permit myself to respond on this blog.

As regards compensation, Mark is playing a game I don’t want to be caught playing, namely “My meaning is better than your meaning!” In fact, Black’s Law Dictionary offers as definitions of compensation both meanings that Mark alludes to:

compensation (kom-pən-say-shən) n. (14c) 1. Remuneration and other benefits received in return for services rendered; esp., salary or wages.

…

2. Payment of damages, or any other act that a court orders to be done by a person who has caused injury to another.

I gather that compensation is mostly used in England to express only the second meaning. But given the promiscuous exchange between American and England, I suggest it would be rash to expect the English understanding to prevail in a given context. Mark pointed me to the following exchange in this 2010 article in The Lawyer about the meeting of American and English cultures at Hogan Lovells, and I think it makes my point for me:

Still, the Americans have won the first lexical battle. Asked about remuneration generally, Harris checks himself. “Oh, we don’t say ’remuneration’ now,” he says, as Gorrell nods in agreement. “We say ’compensation’.” Quite why ’remuneration’ has become a non-word within Hogan Lovells is difficult to work out, but the following day The Lawyer gets some ­clarification. Apparently it boils down to ­accepting the American term, which is “more widely understood as a term around the world, not just in the US”.

You might think I’d be in favor of promoting use of remuneration to express the first meaning and compensation to express only the second meaning, so as to avoid confusion, but in fact I’m not so inclined. The alternative meanings of compensation don’t worry me: unless you’re particularly clumsy, the context in which you use the word compensation would make it clear which meaning you intend the word to have: you should always refer to compensation for something or other.

This ties into my aversion to unnecessary terms of art. Here’s what MSCD 1.11–.12 says:

Lawyers are prone to using doctrinal terms of art in contracts even though simpler terminology is available, rendering those terms of art unnecessary.

For example, in a security agreement, why use hypothecate regarding a security interest? Why not simply use grant? Hypothecate means to pledge without delivery of title and possession. That meaning goes beyond the function required of the verb in language granting a security interest. And that meaning isn’t otherwise necessary, as the security agreement itself will specify what the terms of the security interest are. Hypothecate might have value as shorthand for court opinions or scholarly texts, but that’s very different from what’s required for a contract. Using grant in granting language in a security agreement wouldn’t prevent that grant from being a hypothecation, if the remainder of the granting language is consistent with that meaning. If it isn’t, using hypothecate instead wouldn’t fix that.

In other words, say what you mean to say without relying on the reader to read into your choice of words distinctions of varying levels of obscurity.

It’s just as well that I’m OK with using compensation to express both meanings: I wouldn’t hold out much hope for rehabilitating remuneration, which sounds fuddy-duddy to Americans. I don’t recall encountering it outside of a formal legal document. And it’s not that common in U.S. contracts: only 341 contracts filed on EDGAR in the past 30 days contain the word renumeration.