Skip to main content
Start of main content.

Making contracts more understandable: a new frontier for lawyers

A group of law students and teachers in the boardroom

Consider a typical incorporation clause, for example in a bank account product disclosure statement:

This Product Schedule is specific to the above account and/or any facility made available with the account. Together with the Schedule you will be given our Bankwest Investment and Transaction Accounts Terms and Conditions, our Bankwest Banking Services Rights and Obligations brochure, our Bankwest Your Guide to Banking Fees brochure and our Bankwest Account Access Conditions of Use. Together these documents comprise the Bank’s Product Disclosure Statement (PDS) for the account and/or facility.’

Then consider the same clause, shown visually as it is in BankWest’s product disclosure statement: 

While the first clause is easily recognisable and understandable to a lawyer as a typical incorporation clause, the incorporation of terms into a contract can be an abstract concept for a non-lawyer. The second is far more accessible. 

For many lawyers, writing complex contracts that only the initiated can understand is a point of pride.  But for the non-lawyers whose lives and finances are affected by these contracts, this can be a major problem.  They may not be able to understand the contract and may not have the resources to hire a lawyer to interpret it for them.

However, a new generation of legal thinkers and designers are challenging this status quo and working to make contracts more understandable and accessible to non-lawyers. These efforts are being aided by the realization that even lawyers can be bogged down by the complexity of their contracts and can benefit from simplification and redesign.

The World Contracting and Commerce Association has identified 10 contract design ‘pattern families’ that can be employed to make contracts more accessible:

1. Emphasis: Giving visual prominence to crucial information so readers don’t miss it

2. Explainers: Ways to clarify the meaning of a clause or a contract

3. Layering: Ways to give more relevance to key points, and less to extra details

4. Layout: Ways to arrange content in a readable, legible, and easily findable manner

5. Navigation: Ways to organize content and make it more easily findable

6. Organizing: Structuring content so it is more useful and usable

7. Reviewing: Ways to check that the contract is complete and logically organized

8. Summarizing: Presenting information more concisely to support quick reading

9. Tone of voice: Stylistic and wording choices that influence how your company is perceived by contract readers

10. Visuals: Images to support understanding of language in contracts

Extract below taken from WorldCC contract design pattern library (Copyright WorldCC 2022)

There are many examples of different design patterns being used in practice.

The website Creative Contracts has example contracts illustrated in comic form. The legal design lab at Stanford has also published a range of design experiments with contracts.  Some companies are also reworking their terms of use to be more consumer friendly.  For example, the terms of use of Canva and Buzz Sumo, include a ‘Human Readable Summary’.

What’s appropriate as always depends on context.  There’s a risk of going too far.  Writing legal provisions that may have significant impacts on an individual in a casual or flippant way can raise problems of its own.

While complex commercial arrangements may be difficult to express in pictures, other visuals familiar to non-lawyer stakeholders such as flow charts, tables, swim lanes and timelines can help improve comprehension.  Investing time and effort in making contracts more understandable is now a mainstream endeavour that can benefit both lawyers and non-lawyers.

Matthew Roach is an Honorary Adjunct Assistant Professor at the Faculty of Law at Bond University.

Blog listing


Safe harbour – A shelter from the storm

What are the consequences for directors as regards a company that has become insolvent or is about to become insolvent in the not too distant future ?

Read article

Belonging in the law classroom: rising to the challenge of creating a place where every new law student belongs

The Belonging in the Law Classroom Project aims to improve the experience and retention of first-year Law students.

Read article

Superannuation funds seeking to appoint nominee directors (part two)

This article considers the position of nominee directors and in particular their commitment to act in the best interests of the company whose board they sit on.

Read article

Superannuation funds seeking to appoint nominee directors (part one)

Today, the rate of superannuation contributions by Australian employers is 11 percent of wages, increasing to 11.5 percent on 1 July 2024 and potentially to 12 percent in 2025.

Read article