The best way to avoid disagreements, legal challenges, and potential trips to the courthouse is to ensure that fundamental legal documents that set forth personal and business agreements and planning meet the basic requirements of clarity and thoroughness.

As an initial step, every written agreement should assess obvious and anticipated risk. A good question to ask outside of endeavoring to create a written agreement is “what is my risk?” The agreement should be written so to avoid that risk and allocate that risk to the most appropriate responsible party. Often times life’s lessons and experience inform these risks, and they should be included in any thoroughly crafted agreement.

Often, the most important aspect of any written agreement is the clear defining of terms, and eliminating any ambiguities.

One good way to think about this is that if a legal document that requires determination by outside parties, third parties, and/or judges, the agreement must be clear in terms of the parties’ intent.

Industry or other terminology, even if those terms are known and understood by the parties to an agreement, are never advisable. Envision a situation where the parties to an agreement must call upon an outside, third-party, an arbiter or a judge or a jury to interpret an agreement. Unless the agreement is written to clearly define industry terms or references, it will often fail to meet the basic test of clarity (“lack of ambiguity”) required to easily resolve a disagreement and to keep a case away from a judge or jury.

The best agreements never see the light of day in a courtroom because they are so clear, so well defined and contain no ambiguities, that the parties themselves simply can have no disagreement about what the agreement means. Clear agreements lend themselves to easy interpretation by the parties, and the hoped for result is that the parties can sit down and reacquaint themselves with exactly what was agreed-upon.   A clear, well-crafted agreement helps to ensure that resolution is achieved.  With that assistance, people shake hands, and avoid the cost, delay and unpleasantness of a protracted dispute.

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