LLB202 – Contract Law

Principles of Contract Drafting

This is reproduced from materials from the LLH401 Legal Research Capstone, Topic 10 – Drafting. With credit to Ros
Macdonald.

Contents
About this guide....................................................................................................................................1
What is legal drafting?...........................................................................................................................2
Role of precedents............................................................................................................................2
The Drafting Process..............................................................................................................................3
Traditional legal writing vs plain language.............................................................................................6
Organising your document....................................................................................................................8
Document design and style.................................................................................................................11
Lists, paragraphs, clauses, subclauses and subparagraphs..............................................................13
Clause structure...................................................................................................................................17
Clause structure - where to put the condition?...............................................................................19
Definitions.......................................................................................................................................21
Use of certain expressions..............................................................................................................23
Time limits.......................................................................................................................................25

About this guide

This topic guide is based on the study materials prepared by Ros Macdonald, delivered by
the QUT Law School as part of the unit LWB136 Drafting (see Ros Macdonald and Denise
McGill, Legal drafting: a how to guide (LexisNexis Butterworths, 2015). Note that the guide
does not provide a comprehensive discussion of all drafting techniques. Further research
may be required for drafting techniques required for particular documents and / or
agreements.

By the end of this topic, you will be able to:

 translate the client’s goals into contract concepts (or policy clauses or report
sections); structure and sequence the contract, policy or report;
 draft effective definitions, representations and warranties, covenants and rights, and
discretionary authorities; and
 edit the document for cohesion, concision and clarity, especially through (a)
formatting, (b) sentence structure and (c) precise, modern language.
2
What is legal drafting?

Legal drafting is drafting a legal document. For example, a client may ask you, as a lawyer,
to prepare an agreement, e.g. a contract of sale or a lease. When you prepare that
agreement you draft it. But you do more than just write.

To draft well, you need to:

 Take instructions: ask what your client wants and find out the factual background to
the deal.
 Think clearly: work out how to achieve your client’s goal; consider the risks involved
and how to protect your client.
 Know the law: understand and apply the substantive law around this agreement for
your document to be effective. For example, when you draft a lease you need to
have a solid understanding of the law of leases.
 Think about your reader: identify who will read the agreement and what they need
to know.
 Communicate effectively: prepare a document that is clear, concise and
comprehensive and protects your client’s interests.

Role of precedents
Precedents are standard documents for particular transactions or circumstances. Most
large or midsized law firms have a library of precedents for more frequent transactions.
‘Don’t we have a precedent for this?’ is a common question from lawyers.

Precedents are a useful tool. In a busy practice, a lawyer may not have time to draft the
document from scratch and can use a precedent as helpful start. However, you need to be
aware that precedents are not the full answer. In other words, do not overly rely on
precedents. A precedent will rarely be perfect for your transaction. Precedents are useful
for ideas and as rough sketches. They may also work as a checklist to ensure you have
covered all the issues. They are not a complete answer. By slavishly or mindlessly following
a precedent you are not doing your job as a lawyer. Each client is entitled to your
professional services.

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The Drafting Process

Who prepares the draft document?

Generally the draft is prepared by the lawyer who acts for the dominate party or the party
who confers the right. For example, leases are usually prepared by the landlord’s lawyers.
Contracts for sale of land are prepared by the seller’s lawyer.

Use checklists and precedents

As mentioned above, precedents are a useful tool. Use them as a checklist to make sure
you have covered all the issues. Remember precedents are not the full answer. Also
transaction checklists are available which may help you make sure you have covered
everything. See CCH Queensland Conveyancing Law and Practice for examples for contracts
for sale of land and leases. Check the document against your client’s instructions. Make
sure you have instructions on all relevant issues.

Make sure you are using the correct format

As stated above, it is essential that you apply the substantive law that underpins your
document in order for it to be effective. This includes ensuring that you have used the
correct document format. For example, a deed is required when there is no valuable
consideration. A standard form contract is required by law for certain transactions, such as
the sale of houses and residential land. There may also be certain formal parts of typical
documents, such as an agreement by way of deed.

Check the draft

Once you have prepared the draft, you need to check it. Try to use as many ways as your
time frame allows. Allow a lapse of time and reread your document when you are fresh. For
larger documents, ask a colleague to review it for sense. At the very least, spell check your
document.

Check for stealth in your drafting

Remember the impact of other laws, such as unconscionable conduct, unfair terms in
standard form contracts etc. Make sure that your draft does not inadvertently breach
another law. Note clauses in relation to other legislation need to be drafted carefully; for

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example, clauses related to the Personal Property Securities Act 2009 (Cth) and various
taxation laws.

Note that recitals and statements of facts in documents may operate by way of estoppel.

Be mindful of statutory limitation periods, such as s 10 Limitation of Actions Act 1974 (Qld)

Send the draft to your client

You may need to send the draft to your client for comment and approval. This depends on
the nature of the transaction and the client.

Send the draft to the lawyer for the other party

The other party’s lawyer has no obligation to tell you about errors in the document. Their
job is to review the document to ensure it protects their client’s interests. If they do point
out errors, it is only as a matter of courtesy. If the other party wants changes to the
document, they either:

 mark up the original; or

 set out the changes in a letter explaining why they are needed.

Get instructions from your client about any changes

If changes are requested, you must get instructions from your client about those changes.
You must advise your client about the risks of any change.

Negotiations subject to formal agreement

This process of settling a document may occur while the transaction is still being negotiated.
If so, ensure the draft clearly reflects this. You can do this by sending an accompanying
letter that states the document is in draft; is not legally binding and does not create an
estoppel: Waltons Stores (Interstate) Ltd v Maher (1988) 62 ALJR 110 at 117. Also see
Fernkiln Pty Ltd v Australian Building Industries Pty Ltd (2000) ANZ ConvR 589, where in
circumstances not very different from Waltons, the Queensland Court of Appeal held there
was no binding agreement.

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‘Heads of Agreement’
Sometimes discussion between parties to a proposed commercial transaction gives rise to
‘Heads of Agreement’ recording, in fairly general terms, the points on which they have
agreed.

 If the parties accept the ‘Heads of Agreement’ but propose having terms restated in
a fuller or more precise form, but with no difference in effect, the contract is binding.
 If the parties have finally agreed on the terms and intend no departure from them,
but have made performance conditional on the execution of a formal contract, then
the contract is binding;
 If the parties do not intend to make a concluded contract at all until they execute a
formal contract, then what has been agreed on is the basis intended for a future
contract and is not binding.
 If the expression "subject to contract’ is used, the document is presumed to fall into
this last category.

Signing of transaction documents

Remember every transaction document should be correctly signed off, e.g. it may require
witnesses and or sealing. For a case where incorrect signing under a company seal meant
that a company was not bound see Perkins v National Australia Bank Ltd (2000) ANZ ConvR
78. Also note the solicitor’s responsibility towards those signing documents: see comments
in (2000) ANZ ConvR 4.

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Traditional legal writing vs plain language

Lawyers have a reputation for writing gobbledegook or legalease. Often they appear to be
speaking a different language. This legal English is a variety of English. It is filled with
archaic words, eg hereinbefore, whereas, aforementioned. It is filled with Latin, eg prima
facie, ex parte, habeas corpus, and Norman-French words, e.g. force majeure. It uses
unusual word orders, eg If it should appear to the court... It is often wordy and overly
formal. Legal English seems frozen in time. Below is an extract from the charges register of
an English land title which is sourced from Butt P Modern Legal Drafting (Cambridge
University Press, 3rd ed, 2013) 3.

Schedule of Restrictive Covenants Title Number : DN37753

1 The following are details of the covenants contained in the Conveyance dated 25
January 1750 referred to in the Charges Register:-

AND the said John Jeffery doth for himself his heirs and assigns and every of them
further covenant promise and agree to and with the said Duke his heirs and assigns
and every of them by these presents THAT he the said John Jeffery his heirs or
assigns shall not nor will open or work any Quarry or quarries of stone or any mines
or minerals in or upon the said premises or an part thereof (other than for building
or repairing the said premises) without the Licence and consent of the said Duke or
his heirs or assigns for the purpose first had and obtained.
2 The following are details of the covenants contained in the Conveyance dated 5 August
1958 referred to in the Charges Register:-

The Purchasers to the intent that this covenant shall bind so far as may be the
property hereby assured into whosesoever hands the same may come and the
intent likewise that this covenant may enure for the benefit of and be annexed to
the land in the said Parish of Plymstock which immediately after the execution of
this Deed may remain vested in the Vendor and the Company or either of them
and to each and every part of such land taken separately HEREBY COVENANT
jointly and severally with the Vendor and as a separate covenant with the Company
that the Purchasers and their successor in title will at all times hereafter observe
and perform the covenants and conditions on the part of the Purchaser contained
and set forth in the Second Schedule hereunder written

The Vendor and the Company reserve the right to release alter or vary any of the
covenants to which any other part of parts of the Thornyville Estate is shall or may
be subject and to alter or vary the lay-out of the Thornyville Estate free from the
said covenants or subject to such other covenant stipulations and conditions as the
Vendor or the Company may think fit.

There are several reasons why lawyers continue to draft in a traditional style, including
habit, conservatism and the use of historical precedent documents. However, traditional

7
legal writing has been questioned. The consumer movement of the late 20th century fuelled
this questioning, eg clients expect to be able to understand the documents their lawyers
send to them. The plain language movement developed in response to traditional legal
writing.

Plain language is also known as plain English, though it is not limited to English speaking
countries. The focus with plain language is on the reader, ie that the reader can understand
the document easily. It is not confined to the words of a document., but also extends to the
organisation or structure of the document and the document design.

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Organising your document

A clear structure allows the reader to grasp the information more quickly. The structure of
the document is just as important as the language in getting your message across. Planning
a structure before you write helps you see gaps in information, jumps in reasoning and
duplication.

Guidelines for organising your document

Start with the most important information. Make sure it is the first thing your reader wants
to know, not the first thing you think your reader wants to know.

Guidelines Why?
General before specific It is hard to absorb details if you do not know
why they are being given to you. An individual
piece of information means more to your reader
if they know how it fits into the big picture.
Consider starting with a concise summary. Put
the forest before the trees.
Heart of the deal first Use this structure in transaction documents.
Identify the heart of the deal and things
associated with the heart of the deal and put
them up front. For example:
(a) heart of the deal e.g. seller sells the
property;
(b) things associated with heart of the deal e.g.
what is the price? when will it be paid?;
(c) general housekeeping e.g. effect of death
or dissolution;
(d) what happens if things go wrong e.g.
rescission for breach, dispute resolution;
and
(e) standard clauses and boilerplates e.g.
service of notices, governing law.
Rules before exceptions If you put the exception first you may obscure
the main purpose of the clause.
Keep similar clauses This helps you identify and eliminate repetitious
together information.
Chronological order Use this structure when setting out facts.

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Use headings
Use informative headings to break your document into manageable sections. Highlight your
headings. Use different heading levels to show the document’s internal hierarchy, eg
document heading, clause heading, subclause heading.

Consider using a question as a heading particularly in less formal documents. For example:

Before
Documents
On completion the Seller must deliver to the Buyer all transfer documents…
After
What must the Seller give the Buyer on completion?
On completion the Seller must deliver to the Buyer all transfer documents…

Instead of using just a single word or phrase, try a heading that conveys a whole thought.

Before
Right of entry
The Bank may only enter the premises to install, repair or remove the
secured property after the Bank gives notice under clause 3.
After
Bank may enter premises
The Bank may only enter the premises to install, repair or remove the
secured property after the Bank gives notice under clause 3.

A word of caution
Headings are part of your document and so relevant in interpreting that document. Ensure
your headings are accurate. If a document is heavily negotiated, the text of a clause may
change. Check that the clause heading accurately reflects the final content of a clause.

Number your paragraphs

Numbering your paragraphs can help you show your structure. In legal documents and long
letters, numbering can help your reader find their way around the document. In these
documents, every paragraph needs to be numbered. This is to ensure that the information
can be referenced. For example a client may want talk to you about a particular part of your

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long letter of advice. If each part is numbered, they can easily identify the relevant part.
For this reason, bullet points may not work as well in longer documents. Ideally each main
numbered part of your document will have a meaningful heading.

Table of contents
A good table of contents will show your structure and help your reader find their way
around your document. Again this is particularly important in longer documents.

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Document design and style

Document design is an important tool in making your document easier to read and more
inviting for the reader. Some key tips include:

Keep your sentences down to size

 Only have one or two ideas in each sentence.
 Identify the main idea.
 Put qualifications, modifications or conditions to the idea into separate sentences.
 Put explanations in separate sentences.

This example is from a document appointing a manager to hold trust assets on behalf of unit
holders in unit trust. In the redraft the original sentence is broken into three smaller
sentences. The main idea is in the first sentence. Qualifications and explanations are in the
following sentences. By breaking up the original sentence, you can see that some important
information is missing.

Before
Fees payable on removal
In consideration for the work performed by the removed Manager in
the establishment and management of the Trust before its removal as
Manager, if the Manager is removed (other than for its gross
negligence in the management of the Trust or for a material fiduciary
breach), the Manager will be paid a fee of 0.5% of the Gross Asset
Value.

After
Fees payable on removal
If the Manager is removed, the Manager must be paid 0.5% of the
Gross Asset Value [when? By whom?]. This payment is in return for
the Manager establishing and managing the Trust before the Manager
was removed. This clause only applies if the Manager is removed
other than for:
(a) gross negligence in managing the Trust; or
(b) a material breach of their fiduciary duty.

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Concept not detail
Sometimes you can simplify a clause by concentrating on the concept rather than the detail.

Example

Before
The Tenant must not carry on or permit to be carried on in any part of the
Demised Premises any annoying noxious or offensive business occupation or
practice nor may the Tenant do or permit to be done therein any act or thing
or use or permit to be used any plant or machinery which through noise,
odours, vibration or otherwise becomes or may become an annoyance,
nuisance, grievance, damage or disturbance to any other tenant of the
Building or of the Landlord or of the occupiers of neighbouring premises.
After
The Tenant must not disturb the neighbours.

Try using ‘you’ and ‘we’

Traditionally legal documents have been written in the third person, eg The Buyer must... or
The Tenant may..... It has become more common to see documents written in the first and
second person, eg We must... or You may..... This is particularly common in consumer
documents, such as residential mortgages or insurance policies.

This technique allows you to speak to your reader, keeps your sentences shorter and is
gender neutral. Consider if it is appropriate for your document. However note, this
technique may not always work, particularly for complex documents or where there are
more than two parties.

Minimise cross references

Cross references mean your reader has to jump back and forth throughout the document.
This can tax your reader’s short term memory. However repeating bulky material over and
over can be equally annoying. Cross references have their place, but do not overdo it. You
can avoid cross references by better organising your document.

13
Consider using tables, diagrams and mathematical formulae
You can use tables, diagrams, examples and mathematical formulae as efficient tools to
convey complex information. They do not have to be in a schedule at the end of your
document.

Before
We must receive your completed application form on or before the 15 th day of
the second month following the month you are reporting if you do not submit
your application electronically or the 25th day of the second month you are
reporting if you submit your application electronically.
After - using a table and examples
When must you submit your completed application form?
If you submit your You must submit your form by the 15th day of the
form electronically month that is two months after the month you are
reporting. For example, for June reports, you must
submit your form by 15 August.
If you do not submit You must submit your form by the 25th day of the
your form month that is two months after the month you are
electronically reporting. For example, for June reports, you must
submit your form by 25 August.

Use similar sentence structures where applicable

A forceful way to highlight the similarity between ideas is to express them in similar
structures.

Example – before
There are a number of jobs available, such as fire fighting, tending shrubs and trees,
and as an overseer of the public parks.
Example – after
There are a number of jobs available, such as fire fighting, tending shrubs and trees,
and overseeing the public parks.
Lists, paragraphs, clauses, subclauses and subparagraphs
Clauses and paragraphs
Note that in the context of this guide, the words clause and paragraph are used
interchangeably. A subclause or subparagraph is a numbered part of a clause or paragraph.

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Clauses and numbering
In your document each separate topic or idea should be in a separate clause or paragraph.
As mentioned above each should be numbered with a meaningful heading.

Subparagraphs or subclauses – a list

You may break a sentence into subclauses or subparagraphs. They can help your reader by
providing a visual aid: a list. The sentence must have separate parts that allow you to create
a list.

Without subparagraphs With subparagraphs

1.1 The Tenant must replace the You can not subparagraph. The
damaged glassware. sentence can not be divided into
parts.
1.2 The Tenant must replace the 1.3 The Tenant must replace:
damaged glassware and the (a) the damaged
broken crockery. glassware; and
(b) the broken crockery.

Rules for subparagraphs

Because subparagraphs occur within one sentence, you need to follow some rules to make
them work.

Introductory words
Introductory words are the starting words in your sentence. Introductory words must be
able to be read with each separate subparagraph. All the items in the list must follow
coherently from the introductory words. To test this, read the introductory words before
each separate subparagraph. Remember that this is one sentence. So do not capitalise the
first word of the subparagraph unless it is a proper noun.

Before
Before the transfer, the Tenant must:
(a) obtain the Landlord’s consent;
(b) which can not be unreasonably refused; and
(c) use the Tenant’s best endeavours to have a new tenant become a party to
this lease.

15
 After
Before the transfer, the Tenant must:
(a) obtain the Landlord’s consent which can not be unreasonably refused; and
(b) use the Tenant’s best endeavours to have a new tenant become a party to
this lease.

Resuming words
Resuming words are the words after the list. If your sentence has resuming words, they
must follow coherently from each item in the list.

Example – Car park licence

The Owner grants a licence to the Licensee to:
(a) enter and leave the car park; and
(b) park the vehicles listed in the schedule in the car park,
during the opening Hours.

You may have a further list following resuming words. Again this must be able to be read
coherently. The subparagraph numbering resumes.

Example
The Tenant must replace all broken:
(a) lights in the Premises; and
(b) glass in the Premises damaged by the Tenant’s negligence,
but is not liable for damage caused by:
(c) an inherent defect in the glass or the Building; or
(d) the Landlord’s negligence.

Think about whether this is the clearest way to set out your clause. Instead you may want
to just start a new sentence.

Example – instead start a new sentence

1.1 The Tenant must replace all broken:
(a) lights in the Premises; and
(b) glass in the Premises damaged by the Tenant’s negligence.
1.2 The Tenant is not liable to replace the lights or glass if the damage is

16
 caused by:
(a) an inherent defect in the glass or the Building; or
(b) the Landlord’s negligence.

Do not sub-sub-sub paragraph

Sentences that divide to more than three levels become difficult to read. If you find your
subparagraph is numbered 1.1(a)(i)(A)(I), you are in trouble. Think about restructuring your
sentence or starting a new sentence or clause.

Punctuate your list

A list in a document must appear with punctuation and must have:

(a) a colon after the introductory statement;

(b) a semicolon to end each point;

(c) an ‘and’ or an ‘or’ after the last semicolon; and

(d) a full stop to end the last point unless there are resuming words, in which case the
last point ends with a comma.

Use the levels logically

Do not use subparagraphs instead of paragraphs. Make sure your meaning follows the
layout and logic of the various levels.

Remember that lists can be overdone

Excessive ‘listing’ makes sentences harder to understand. A list may be too long and cause
information to become too fragmented. Avoid ‘over shredding’.

17
Clause structure

In 1843 English barrister George Coode published his work ‘On Legislative Expression’. His
influential work was directed to legislation but spread into contracts and other documents
that control people’s rights. He stated that a legal sentence consisted of four parts. Each
component of the sentence was to be in the order listed here:

Component What is it?

Case The circumstances in which or the occasion
upon which the sentence is to take effect.
Condition The conditions which must be satisfied before
the sentence can take effect, i.e. what is to be
done before the sentence can work.
Legal subject The legal person who has the right, discretion
or obligation.
Legal action The action which expresses the right, discretion
or obligation.

For example:

Component Example
Case Where there is any question between Shires as to
their boundaries
Condition and, if a majority of not less than two thirds in
number of the landowners of such Shires so
resolve,
Legal subject the Local Authority Commissioners
Legal action may arbitrate that question.

However, there are problems with Coode’s rules, including that sometimes it is hard to
distinguish if a phrase is a case or condition, when you have two or more cases or
conditions, the sentence becomes very difficult to read the rules may produce very long
sentences.

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Therefore, an alternate structure is to just think of a case, condition or exception as
something that modifies the subject and the action. You can call them all conditions. This
means there are only three components in a clause.

Component Example
Subject The Purchaser
Action may survey the Land
Conditions or exceptions for the purpose of identifying the boundaries.

Move intrusive material - keep subject and action together

Example
The Employer, at any time during the probationary period, may terminate the
Executive’s employment.
Problem
Here the subject, ‘the Employer’ and the action, ‘may terminate’ are separated by
the condition. This makes the sentence harder to read.

Keep parts of the verb together

Simple verbs are made up of one word eg ‘agree’, ‘resolve’ and ‘apply’. Compound verbs
are made of a combination of words eg ‘had agreed’, ‘may resolve’, ‘must apply’. Sometimes
the parts of a compound verb become separated in a sentence. This makes the sentence
difficult to read.

Before
The Grantee may, by notice in writing to the Owner not less than 28 days after the
date of this document, exercise the option
After
The Grantee may exercise the option by notice in writing to the Owner not less than
28 days after the date of this document.

Clause structure - where to put the condition?

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Firstly identify the condition – provisos.
Provisos are very common in legal documents. Commonly in traditional legal documents,
they would be marked with ‘PROVIDED THAT...’ The correct use of ‘provided that’ is to
qualify the words that have come before.

However, the words ‘provided that’ can often be used in other ways and this may lead to
ambiguity.

Examples Instead try

‘Provided that’ marks an exception
The Tenant must repair the Replace with except that or but.
premises provided that the
Tenant need not repair damage
caused by fair wear and tear.
‘Provided that’ marks a condition
The Buyer may pay the lower Replace with if or as long as.
price provided that the Buyer
pays on or before 30 June 2012.
‘Provided that’ marks an alternative
This agreement ends on the first Start a new sentence or use or.
anniversary of the drawdown This agreement ends on:
date provided that if the Lender (a) the first anniversary of the
agrees to the Borrower’s request drawdown date; or
for an extension, this agreement
ends on the second anniversary (b) the second anniversary of
of the drawdown date. the drawdown date if the
Lender...
‘Provided that’ has no meaning
The Tenant must repaint the Replace with a full stop. Here the words
premises provided that if there connect unrelated material.
has been an earthquake, the
Tenant must repair any structural
damage.

How many conditions attach to your main statement?

Consider how many conditions attach to the statement. This determines where you place
the conditions. Think of ‘if’ statements as conditions. By starting with the ‘if’, some of your
readers may not need to read the rest of the sentence.

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 Example
If the Agent is an unlisted company, [then] any change in the shareholding of the
Agent altering the effective control of the Agent is taken to be a proposed
assignment of this document.

If there are multiple ‘thens’, start with the ‘if’ and list the ‘thens’.

Example
If the Licensee suspects any infringement of the licence then the Licensee must:
(a) immediately notify the Licensor of the infringement; and
(b) take any action required by the Licensor in connection with the infringement.

If there are multiple ‘if’s, start with the ‘then’ and list the ‘ifs’.

Before
Any Director who serves on any Committee, or who devotes special attention to the
business of the Company, or who otherwise performs services which in the opinion
of the Board are outside the scope of the ordinary duties of a Director, or who at the
request of the Board engages in any journey on the business of the Company, may
be paid extra remuneration as determined by the Board.
After
A Director may be paid extra remuneration if that Director:
(a) serves on any Committee;
(b) devotes special attention to the business of the Company;
(c) otherwise performs services which in the opinion of the Board are outside
the scope of the ordinary duties of a Director; or
(d) engages in any journey on the business of the Company at the request of the
Board.
The Board must determine the amount of the extra remuneration.

Where the condition follows two or more nouns

Where a condition follows two or more nouns, the reader may become confused about
which noun is qualified.

Before
No pupil shall, on the ground of religious belief, be excluded from or placed in an

21
 inferior position in any school, college or hostel provided by the council.
Problem
Does the condition, ‘provided by the council’, apply to ‘school’ and ‘college’?
Try this instead
Where a school, college or hostel is provided by the council, no pupil may be
excluded from or placed in an inferior position in the school, college or hostel on the
ground of religious belief.
Or use subparagraphs
No pupil may be excluded or placed in an inferior position on the ground of religious
belief in any:
(a) school;
(b) college; or
(c) hostel,
provided by the council.
Or break up the clause into shorter sentences
A school, college or hostel must not:
(a) exclude a pupil; or
(b) place a pupil in an inferior position,
on the ground of religious belief. This clause only applies where the school, college
or hostel is provided by the council.

Definitions
Definitions can help your reader. Definitions are useful to expand a meaning, as a short
hand label or to limit a word to one of several available meanings.

Example – option agreement

Where Clause content
Clause 1 Definitions In this document Land means the land situated
at 345 Firn Road, Chandler, Brisbane contained
in Lot 3 on Registered Plan 309765.
Clause 2 Grant of the The Owner grants an option to the Grantee to
Option buy the Land.

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However the modern trend is to overuse definitions. Use definitions to help the reader not
the writer. Remember that definitions force the reader to memorise a new and possibly
unnatural vocabulary or constantly flip back and forth.

Guidelines
 Be consistent! Once you have chosen a label, stick to it.
 Do not stretch definitions. Choose a label that is easy for the reader to identify and
is consistent with the ordinary meaning of the word e.g. avoid ‘Fire includes flood’.
 Choose a label that the reader will easily identify.
 Avoid similar sounding labels e.g. lessee and lessor, mortgagee and mortgagor.
Instead try tenant and landlord, lender and borrower.
 Do not put a substantive obligation or right in a definition. Give it a clause of its
own.

Inclusive definitions and restrictive definitions

You may want to define a word to extend its ordinary meaning or restrict it to a specified
meaning. To restrict the meaning, use means. To extend the meaning, use includes. Do not
use means and includes. This is contradictory or, at least, superfluous.

Examples
Restrictive definitions – use ‘means’
Premises means unit 2, Sunshine Plaza, 234 David Low Way, Mudjimba,
Queensland.
This definition restricts Premises to only that property.
Inclusive definitions – use ‘includes’
Costs include fees and disbursements payable to all contractors.
This definition extends the ordinary meaning of Costs to those items.

Where to place your definitions in your document

In legal transaction documents, definitions are commonly placed in a separate clause at the
beginning or end of the document. The definitions are listed in alphabetical order. If a

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definition is used only in a particular clause, you may want to place the definition in that
clause.

Remember also that some definitions are implied by statute. For example s 48 Property Law
Act 1975 (Qld) provides:

(1) In all deeds, contracts, wills, orders and other  instruments executed, made or coming into
operation after the commencement of this Act, unless the context otherwise requires—
(a) 
"month"  means calendar  month; and
(b) 
"person" includes an individual and a corporation; and
(c) words indicating a gender include each other gender; and
(d) words in the singular include the plural and words in the plural include the singular.
(2) A covenant, power or other provision implied in a deed or other  instrument because of this or any
other Act shall be construed in accordance with  subsection  (1)  .

Use of certain expressions

Shall
‘Shall’ is ambiguous: is it a futurity, direction or obligation? Traditionally shall is used to
indicate an obligation, where someone is compelled to do something. But shall can be used
for many purposes including to express futurity, ie something that will happen in the future.

Purpose Example
To grant a right The Buyer shall have the right to
inspect the property.
To impose an obligation The Tenant shall keep the Premises in
good repair.
To give a direction A receipt from an authorized officer
shall be sufficient evidence of
satisfaction of the debt.

However shall may be ambiguous and for this reason is not frequently used in modern
drafting.

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 Future event or not?
Example
If a beneficiary shall become
bankrupt, the trustee shall not
distribute trust monies to that
beneficiary.
Obligation or discretion?
Example
The court shall proceed to a
summary trial (i.e. a trial without a
jury).
Problem
What if the beneficiary was
already bankrupt when the trust
was created?
Problem
Does the court have to do this?
Or is this merely a direction?
R v Craske ex parte
Metropolitian Police
Commissioner [1957] 2 QB 591

Consider instead the following alternatives:

For obligations Use must.

Example: The Tenant [shall] must keep the
premises in good repair.
For discretions or Use may.
permissions Example: A partner [shall] may assign their
interest in the partnership.
For entitlement Use may
Example: The Employee may elect to receive
payment weekly, bi-weekly or monthly.

Future events Use will or specify a time and use must.

Example: On the date of completion, the Buyer
must pay to the Seller the price.

Must’ v ‘will’
Do not use will instead of must. It may carry a softer tone, but will may be ambiguous in
the same way as shall. For example: ‘On the date of completion, the Buyer will pay the
Seller the price’. In this example, does the buyer have to pay? Does this sentence merely
give the buyer a direction or is this an obligation? If you are trying to impose an obligation,
use must.

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This use of must and may has now been adopted in legislative drafting, see Acts
Interpretation Act 1954 (Qld) section 32CA.

‘Must’ and tone

Occasionally must may feel too harsh or heavy handed, e.g. in correspondence in a matter
where the parties have worked hard to develop mutual respect. If so, try is to instead. If
you choose this phrase, use it consistently throughout your document.

‘Must’ or ‘should’
Avoid should in transaction documents. In ordinary English should implies an ethical or
moral obligation rather than a legal one.

Be careful with ‘deem’

Deem is a formal word often used to create a legal fiction; i.e. a thing is deemed to be
something else or an event is deemed to have occurred, despite never having happened.
Think carefully before you use a deeming provision to create a fiction. Sometimes you may
need to. If so, do not use deem. Deem is not a term of art. Instead try a plainer phrase
such as treat as, or take to be.

Example Try instead

If the Rent is unpaid for seven
days, the Tenant is deemed to
be in default.
The Registrar may register the
transfer where upon the person
named therein shall be deemed
to be the registered owner.
If the Rent is unpaid for seven days, the
Tenant is in default.
The Registrar may register the transfer
upon which the person named in the
transfer is the registered owner.

Time limits
If possible, try to specify a time period or date. Expressions, such as ‘reasonable time’, ‘as
soon as possible’, ‘immediately’ are capable of judicial determination but may be elastic.
For example, to do something ‘immediately’ means it must be done as soon as possible in
the circumstances, taking into account the nature of the act to be done.

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How to specify time limits
You need to think about:

 when your time period starts; and

 how long the period lasts and so when it ends.

Do you include the first day of the time period or not? Here are some examples.

Phrase or word What does it mean? Drafting tip

From Generally the date from which the Avoid. Instead try
A licence is granted time period is calculated is using commencing
for 12 months from excluded, i.e. you do not include on.
28 November. 28 November in the calculation;
Forester v Jododex (Australia) Pty
Ltd (1972) 127 CLR 421. But this is
not an absolute rule. From and
after has the same potential for
uncertainty.
On, on and after and The date specified is included. The Use this to start your
on and from tenant could go into the property time period on the
The lease commences on 1 January. specified date.
on 1 January.
On or about This is uncertain. It could mean a Avoid this phrase.
The accident day or two either side of the event.
occurred on or about This phrase is common in
12 March. statements of claim where this
flexibility may make it useful.
On or before The date specified is included.
You must apply on or
before 30 June.

After The date specified is excluded

Seven days after the from the calculation. You do not
notice is given, the include the date the notice was
buyer must.... given.

Within ...after, within The date specified is not included. Use within ...after
...from The date of the accident does not rather than within...
Within 14 days after count in the calculation of 14 days. from.
the accident...

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How long is the time period?

Word Meaning
Day Generally this is midnight to midnight. The common law does
not recognise fractions of a day. So usually where a
document allows a day to do something, then it may
ordinarily be done by midnight on that day. However this is a
general rule. Consider specifying a time by which the
obligation must be performed, say 5.00pm on the specified
day.
Week Generally this is seven days. But it may have other meanings.
It may start on Sunday or only consist of the working week.
Avoid calculating time in weeks.
Month At common law, month means a lunar month. However
section 48(1) Property Law Act 1974 (Qld) provides that a
month is a calendar month in all deeds, contract, wills, orders
and other instruments.
Clear days or Generally you do not count the days on either end of the time
not less than period where these words are used.
# days

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