The following article was prepared by Mike Taylor, C.P.M., for distribution to ISM affiliate newsletters
By now you all know when I use the word contract I mean purchase orders & contracts of all types – right?
I noted with interest an article in a recent news report about a police department who was switching radio traffic back to plain English. Many police and fire departments used to use the old CD shortcut codes [ 10-4 good buddy] in their radio and dispatch traffic. While it might have been a good idea to speed up radio traffic at the time – in the long run – the codes are just one more potential confusion factor. If you are new to the police force and don’t understand what a 10-20 code means – you might be lost [pun intended] in the conversation. So at least one department has now switched back to just plain old English.
That is, when the radio dispatcher wants to know where you are, she can just ask “ What is your location” . Seems like an obvious change. But sometimes the obvious is hard to see for people who are directly involved. Take for example our habit of using transportation and other contract terms by abbreviation. [FOB, CIF]. We’ve been using them for so long that no-one notices.
The problem can be that not everyone has the same idea of what the abbreviation means – creating an ambiguity. In contract writing space, an unclear term, is an invitation to complicated and costly problems. When specifying transportation terms in particular we have significant opportunity for confusion because we are often trying to include several different concepts in one term.
For freight terms, I suggest you spell out exactly what you mean: 1) title to the goods will transfer here 2) this party will pay freight, loading & unloading to place the goods here 3) this party will insure the shipment or suffer the shipping loss 4) this party is obligated to pay once the goods are delivered here, 5) this party will pay the carrier and then add the cost to the invoice, 6) this party will pay the carrier and absorb the cost, etc.
Seems simple doesn’t it – but look at a few of your contracts and see if all of these elements are really crystal clear or maybe just a little confused. As we start doing more business internationally clarity of terminology becomes even more important. You could have duties, import fees, and tariffs to account for in international contracts as well.
O.K., now that brings me to my second point. Take the pencil away from the engineer who is trying to sound like a lawyer in his contract or specification writing. Even lawyers don’t agree on what all those words mean, so stop trying to use them. Write your requirements or contract language in simple words. If you mean contractor then don’t say “party”. If you mean delivered, don’t say “performed”, etc. Bigger words are only helpful in scrabble. More words can be more confusing. It drives me nuts [more so] when people try to make their sentences sounds “legal” and end up writing something completely screwy. In most cases you will be better off with just a simple statement.
And that reminds me of my 3rd point. Forget high school prose. We don’t need elegant, we need clarity:
|If a long bulletized list will do, then use it – not long paragraphs|
|You don’ have to creatively use a variety of nouns or adjectives – always refer to the same thing with the same word.|
|Avoid adjectives which imply opinion or need to be defined - it’s not a “good” job it’s a job according to the specification.|
|Avoid language which could be used against you in court – “ What did you mean in your letter by ‘hold his feet to the fire’” ?|
|Stop explaining why – it’s irrelevant and will probably cause you to violate one or more of my previous bullets. We are directing you to do x,y,z. [period- there is no because…]|
|Stop writing long involved compound sentences. Remember the example I gave you in a previous article about a contract dispute decided over the placement of a comma?|
Hopefully you get my point. Contract clarity begins with you.
Read more articles about negotiation and creative contract solutions in the MLTWeb Purchasing Toolbox at http://www.mltweb.com/prof/tools.htm and in the BuyTrain news article archive at http://www.mltweb.com/tools/buytrain/index.htm
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|Materials prepared by Mike may be shared for supply chain education, provided that this source is credited and no fee is charged. The rights for any other use are withheld.|
|Copyright; Michael L. Taylor, C.P.M.|