Contracts Can Be Written On Toilet Paper

The National Post has a nice review on a BC Court of Appeal contract case. The Court of Appeal upheld a contract that was written on a sheet of lined paper (not quite tissue paper – but the point applies). The contract was for the sale of shares in a company. The sale price was $1.5 million. The Court of Appeal applied basic contract principles and the legal concept of “a reasonable man” and held that the contract was valid. You can find the case here.

When lawyers write contracts, the language tends to be quite technical and archaic. Most persons without legal training have no clue what the a particular term of a contract is for. There is a reason for writing a contract in legalistic language – for the same reason doctors use medical jargon – for clarity. More specifically, for clarity when dealing with other lawyers. Other lawyers can understand the archaic language. Of course, there is the element of tradition, but the main benefit of legalistic language is for other lawyers to understand what the contract is saying. Additionally, a lawyer who is writing a contract presumably is familiar with case law and other legal principles that should be addressed. They draft contracts with these principles in mind.

This is where I believe lay persons who are writing contracts may make mistakes. If you want to write a good contract without legal help, do not use legal language. Use plain language. Cover the essential areas and make sure that value is exchanged. This is the best way of ensuring that the contract will be enforced.

And above all, be clear on what you are agreeing to.

By doing this, you may just become great at drafting your own contracts.