The importance of a good definition

Because of clarity, it is strongly preferred to explicitly define frequently occurring terms or items in a contract with complex meanings. The defined term is then capitalized. Working with definitions can make an agreement a lot clearer and avoid misunderstandings. By consistently using one term, it is always clear what is being referred to. Confusion caused by two or more slightly different descriptions is thus avoided.

There are roughly three ways to include definitions in a contract:

  1. Definitions at the beginning of the contract (Article 1)
  2. Definitions at the end of the contract (last article or appendix)
  3. Definitions in the running text

It is customary to open a contract with definitions. With this, these terms are immediately familiar, and also can be found immediately upon later reading. This does make the contract more difficult to read. Including definitions at the end (or in an appendix) has the advantage of making the main text more accessible, as one does not have to struggle through a mountain of definitions first. The disadvantage is that the correct page is harder to find, unless one has the attachment start on a new page.

Definitions in the running text have the advantage of being the most compact way of including definitions. Retrieving definitions is very difficult, though. Often, for this reason, this way is used only for definitions that are only used in one and the same article.

Definitions can refer to each other, but be careful not to create circular definitions. A definition must either stand alone or build on other definitions.

Definitions should not contain actual provisions, but merely define terminology. If one does, there is a chance that the other party will overlook it, which can lead to needless discussions about “hiding” and “snags. In addition, it does not result in enhanced readability when one includes lengths of negotiated text in the definition of a term. Definitions should be short and concise. The digression on the implications of the definitions can then be included in the actual contract clauses.

With the rise of legal tech, you hear it more and more often: lawyers and legal professionals need to learn to program. Or vice versa: programmers will soon become better lawyers than the classically trained master of law. If more and more legal matters are being handled through software, you had better learn how software works and how you are going to handle legal matters with it.

There is certainly a grain of truth in it. Software is already a very important part of our society. Also in legal terms: many things that are not allowed are not allowed because the software does not allow it. Code as law, as Professor Lawrence Lessig calls it. For example, on many sites you cannot copy photos because that feature is disabled. That is much more effective than invoking copyright afterwards.

Smart contracts are on the rise. Software programs that independently execute and enforce contractual agreements. Autonomous and decentralized, from the blockchain. When a client requests it, it is helpful if you, as a lawyer, can go along with that.

But is it really necessary? Knowing how something works is not the same as having to do it yourself in detail. Those who file a lawsuit over a poorly repaired car do not have to be mechanics themselves. Knowing what a carburetor is is helpful, but much more than that should not be necessary. Ditto for software stuff: knowing what a RESTful API is or why an unhandled exception is annoying is very useful but should you be able to program them yourself?

Maybe not. But convenient it is. Learning to program yourself is one of the best ways to gain knowledge about how software works. It requires creativity and logical thinking, both of which happen to be skills a good lawyer has no shortage of. And it offers a very different challenge than that paper contract or pleading note, but what you learn there is more broadly applicable.

Should you have any doubts, I do say: do it. Because programming is just plain fun. And deepening a business skill that is also fun requires no doubt.

The term legal tech actually refers to all technology, especially ICT technology, that affects the work of the legal services provider. The recent rise of big data and artificial intelligence have put legal tech on the map, but the technology is older, of course.

The first step to legal tech involved automating the peripheral issues surrounding legal work. Time writing, file management and document formatting, for example. This yielded a substantial efficiency gain, but did not fundamentally change the way the legal professional himself works.

The second step was already getting closer: being able to automatically look up references and case law. Online databases made tracing sources and searching for substantiation much easier. Model contracts provided inspiration when writing agreements. Still the work itself was about the same, but again a substantial efficiency gain.

The third step in legal tech touches on legal work itself. Analyzing cases with big data, for example: what strategies are useful, what do we know about this judge given previous rulings, or what have we learned from this opposing party with other clients. Going through files for red flags or attractive files. Or having an artificial intelligence analyze a letter from a counterparty: is there anything special in this, can we dismiss it with standard arguments or do we not need to respond?

Of course, this third step still does not eliminate lawyers. But it does shift the focus in their work greatly. This is the difference from the first steps, which gave only efficiency gains and no fundamental changes. This third step is fundamental though: we are going to rely on big data analytics and artificial intelligence instead of checking and questioning everything ourselves. That promises something!


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