Contract Countdown Series – Most Dangerous Risks #13

If you’ve been following our Contract Countdown series, you’ll know that we’ve been counting down from #15 to #1 for changes you can make to your Terms and Conditions of Sale that would enhance the trading relationship between a Supplier and a Customer. To refresh your memory, see #15 – REFERENCE TO OUT OF DATE LEGISLATION and #14 – JURISDICTION.

This next change, #13, is all about something that you don’t know it’s there (until you do). Weird, we know.

#13 READABILITY

Terms and Conditions aren’t just for us lawyers when things go wrong. A contract is the rule book for how you do business with your Customer. Your Terms should clearly communicate the procedures to be followed by both parties in whatever aspect of business they are dealing with.

The problem is, when those Terms are drafted by the parties themselves, not all legal risks are covered. But when the Terms are drafted by lawyers, legal risks are so front-of-mind that things like structure, layout, plain English wording and simplification of legal jargon can go out the window. And in those moments, the readability and usability of a contract sometimes gets lost. It also doesn’t help when you need a microscope to read font that is squeezed within an inch of its life so that it fits on into 1 page.

Number 13 on our Contract Countdown is the ease (or not) with which parties are able to read, understand and use their contract.

For example, have a look at this before and after and see what works better:

Before The Customer hereby acknowledges and agrees that the invoice issued to the Customer by the Supplier shall be paid by the Customer, and payment of which shall be received by the Supplier, within 30 days after the month in which the invoice was issued.

After You must pay Our invoice by the due date displayed on the invoice.

The knock-on effect of an unreadable contract is, well… pretty darn shite. Increased management time dealing with complex contracts. More training and procedures so that your employees better understand and implement the rules of the contract. Your Customers don’t actually read (or sign) your Terms. Or worse, your terms are returned by a customer after being attacked by a red pen. The legal costs that are spent on disputes, many exacerbated by stalemates over how a contract should be interpreted.

So, what can you do?

Making sure that your Terms are written in plain English, typed in a larger font, structured in a way that flows logically throughout the business relationship life cycle, and set out in a style which is visually appealing are all ways to improve this often “unseen” pain point of readability.

Want to know more? Want to see how your Terms could be improved for that better Customer relationship? Contact us for a free assessment of your current Terms, our LEDcheck © contract health check will show you what you may be missing out on.

For more information, contact Ledlin Lawyers:-

Email:               info@ledlinlawyers.com.au  

Phone:              02-8488-3389