Have you ever been tempted to create an Agreement by cutting and pasting? Here’s what can happen….
I have recently been sent a contract for review, and what I discovered was a mish-mash of bits and pieces which had clearly been cobbled together from several different agreements.
The result? A potentially very costly mess!
Many of the terms used were not defined, and the (single) subject matter of the agreement (defined as ‘the Products’) was also referred to in various places as:
“the Work (as defined below)” (It wasn’t!)
“the Research Services”
“the Results”
“the Development”
and a couple of others which I can’t repeat here for fear of identifying the parties.
None of these terms were defined in the document or used in any consistent manner – in fact they seemed to be used interchangeably. In addition, there was reference in one definition to a Schedule which did not exist and was not referred to anywhere else in the contract.
So, does this matter, or is it just nitpicking?
Unfortunately, not only does it matter, but it can have serious implications. Here’s why:
The payment terms did not refer to the Products at all – despite several of the undefined terms being used in it, – and the warranty clauses did not link back to the Products either. Accordingly, the only possible ‘agreement’ between the parties would have been for the provision of Products, without the benefit of a warranty, for an undefined (and therefore, by law, a ‘reasonable’) payment.
However, in this case, the wording created such confusion and uncertainty that the whole agreement would almost certainly have been unenforceable.
This was a high value, technical contract, which ran to several pages. However, whatever the nature or value of your agreement, if you have taken the trouble to negotiate a deal, surely you want it to be enforceable?
If you have an agreement that you know (or suspect) has been created by cutting and pasting, and want to be sure that you are protected, please get it checked out – it may have been cheap to create, but it may also not be worth the paper it is printed on.
Tags: Cut and Paste, Definitions, Enforceability, Uncertainty
[...] As well as creating a huge amount of uncertaintly, the above examples highlight a common problem – which is the tendency to focus upon what a contract contains, rather than what is omitted. This is an especially easy trap for lawyers with no practical commerical experience, and business people with no legal experience, to fall into. It is also a serious side-effect of cut and paste drafting (as to which, see my earlier article: The Cut and Paste Trap.) [...]
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Thanks – I’m glad you liked the article. By the way, I’m a ’she’ not a ‘he’!
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Thanks – I’m glad you found them interesting. Keep a look out for more coming soon!