Why I Went from Rolling My Eyes at a Particular Contract Clause to Including It Prominently in All of My Contracts
I used to roll my eyes every time I’d see a particular clause, but I’ve had a change of heart…and may have discovered a new favorite clause.
It looks something like this:
X and Y are collectively referred to in this Agreement as the “Parties” and individually each as a “Party.”
For a long time, when I’d see this clause in a redline, I’d roll my eyes.
It usually meant the rest of the document would be filled with redlines changing the word “party” to “Party.”
But I’ve done a 180.
Now:
✔️ I’m working on putting this clause in all my contracts.
✔️ I’m going to put it right in the 1st paragraph.
✔️ I’m looking for more clauses just like it.
Why?
What accounted for my change of heart?
I realized who the clause is FOR.
❌ It ISN’T FOR Chief Justice Roberts to cite in oral arguments at SCOTUS. “Now, counselor, what about the clause that mentions the parties with a capital P?”
❌ It ISN’T FOR opposing counsel in litigation. They aren’t going to read this clause and tell their client, “Sorry, this clause here in the contract says we lose.”
❌ It ISN’T FOR the business people who are reviewing the contract years from now, trying to figure out if they should continue the relationship.
Nope.
The clause is FOR just 1 person…
The person who would redline the contract to add the clause!
Here’s what I’m thinking…
The clause itself isn’t problematic. It’s easy to accept and move on.
The problem is that it’s added as a redline, usually to the 1st paragraph. So it’s likely the FIRST redline somebody would make to the contract.
That’s bad.
Once somebody makes 1 redline, they’re in Redline Mode. They feel justified in making more redlines.
“I already made 1 redline,” they think, “and since somebody is going to look at that redline, I might as well make a few more…”
Their first redline broke the seal.
And when that happens in the 1st paragraph, that exposes the rest of the contract to lots of redlines, even minor and unnecessary ones.
1 redline leads to more redlines.
But this clause — however substantively unnecessary I think it is — avoids the redline.
It doesn’t give our reviewer a reason to enter Redline Mode.
And because it’d likely be a redline in the 1st paragraph, that’s a valuable redline to avoid!
Sure, they’ll probably still find something else to redline, but who knows how many redlines we might avoid by delaying Redline Mode?!
So that’s why I’ve changed my mind on this clause: it avoids a redline.
Do you have any clauses that you use specifically to avoid a redline?
It looks something like this:
X and Y are collectively referred to in this Agreement as the “Parties” and individually each as a “Party.”
For a long time, when I’d see this clause in a redline, I’d roll my eyes.
It usually meant the rest of the document would be filled with redlines changing the word “party” to “Party.”
But I’ve done a 180.
Now:
✔️ I’m working on putting this clause in all my contracts.
✔️ I’m going to put it right in the 1st paragraph.
✔️ I’m looking for more clauses just like it.
Why?
What accounted for my change of heart?
I realized who the clause is FOR.
❌ It ISN’T FOR Chief Justice Roberts to cite in oral arguments at SCOTUS. “Now, counselor, what about the clause that mentions the parties with a capital P?”
❌ It ISN’T FOR opposing counsel in litigation. They aren’t going to read this clause and tell their client, “Sorry, this clause here in the contract says we lose.”
❌ It ISN’T FOR the business people who are reviewing the contract years from now, trying to figure out if they should continue the relationship.
Nope.
The clause is FOR just 1 person…
The person who would redline the contract to add the clause!
Here’s what I’m thinking…
The clause itself isn’t problematic. It’s easy to accept and move on.
The problem is that it’s added as a redline, usually to the 1st paragraph. So it’s likely the FIRST redline somebody would make to the contract.
That’s bad.
Once somebody makes 1 redline, they’re in Redline Mode. They feel justified in making more redlines.
“I already made 1 redline,” they think, “and since somebody is going to look at that redline, I might as well make a few more…”
Their first redline broke the seal.
And when that happens in the 1st paragraph, that exposes the rest of the contract to lots of redlines, even minor and unnecessary ones.
1 redline leads to more redlines.
But this clause — however substantively unnecessary I think it is — avoids the redline.
It doesn’t give our reviewer a reason to enter Redline Mode.
And because it’d likely be a redline in the 1st paragraph, that’s a valuable redline to avoid!
Sure, they’ll probably still find something else to redline, but who knows how many redlines we might avoid by delaying Redline Mode?!
So that’s why I’ve changed my mind on this clause: it avoids a redline.
Do you have any clauses that you use specifically to avoid a redline?