How to judge if a contract is detailed enough?

Question

What is a contract and what is required for them to be valid? explains the basics of a contract. However, any simple contract may potentially have ambiguities that would make it difficult or impossible to decide if the contract is being fulfilled. For example, if I make a contract for someone to fix my car, I should actually specify what exactly needs fixing and what would constitute being fixed. Otherwise the person could just top off the oil and call it a day.

Presumably at some point, common sense is exercised to decide if some unexpected development follows this spirit and intent of the contract or not. After all, it's difficult if not impossible to state anything with perfect disambiguity. But some contract authors still try. Since EULAs are probably written by some pretty good lawyers, does that mean that such overly detailed documents can be considered the standard of a very good contract? What is a reasonable standard for how much a contract should specify, and how much should be left to "well, let's just hope we can all come to some agreement if and when that weird freak case happens".

When contract lawyers write a contract, how do they decide when it's "detailed enough"? Are there rules of thumb that a lay person could use?

Answer 1

The primary ideology in legal writing is "use what has worked". This is a millenium-old practice in the common law tradition (predating the development of what is known as "the common law"). This explains the substantial similarity between legal documents, and is responsible for the rise of "legalese" – legal writers do not start from scratch. If a given contract form works for one case, it's reasonable to expect that it will work for analogous cases (where "works" means "has the expected outcome in case of legal dispute"). Rental agreements are exemplars of recycling of contracts which has worked before.

A recycled contract can fail for two main (and related) reasons. First, the legislature may change the law – for some political reason, it may be decided to forbid a certain condition in a tenancy agreement. Second, appeals courts may "discover" that a condition really has a different effect that was assumed (e.g. which words does "knowingly" refer to). This can motivate post hoc or preemptive rewriting of contract templates (where the lawyer sees a risk in using the old language but where the courts have not definitively handed down a ruling).

There are various principles of legal interpretation which influence legal writing, generally summarized in a Latin expression such as Expressio Unius Est Exclusio Alterius, meaning "the mention of one thing is the exclusion of others". The practical effect of that canon of interpretation is, the more explicit your list, the less likely a novel situation will be already covered. For instance, if your present a contract that forbids passengers from "possessing weapons" on the boat, you haven't defined "weapon", so that is left to common sense. If you define "weapon" as "pistol, rifle, shotgun, explosive, poison gas, knife, flame thrower, sword, bayonet, brass knuckles, nunchuck", you run a risk that your list failed to include death-ray (a new technology). The risk is that in adjudicating the contract, the court will decide (invoking contra proferentem) that as the author of the contract you did not intend to exclude the death ray, because you could have included it in your list but did not. (It's not guaranteed that the court will exclude a death ray, but there is a risk). In other words, too much explicitness can work against you, in case there is some slightly different scenario that you did not anticipate.

There is a distinction between an actual ambiguity which is a property of language, and vagueness. A clause that says "drive a car or truck owned by a competitor" can be interpreted by the rule of English as meaning "drive a car owned by a competitor or a truck owned by a competitor", or "drive any car, or else a truck which is owned by a competitor" – this is a linguistic ambiguity. Linguistic ambiguity is more easily solved and correspondingly should be more vigorously eliminated. Trying to micro-define "computer" is more an exercise in imagination (does it include smart phones, smart watches, your car's ignition system?).

Answer 2

How to judge if a contract is detailed enough? Are there rules of thumb that a lay person could use?

There is no rule of thumb. A contract just needs to address the relevant issues without leaving material gaps that of which a party can take advantage in the future. The mere fact that many contracts are replete with intimidating legalese does not necessarily mean that they were "written by some pretty good lawyers". For instance, the 4th and 5th images in this post show a real-life example of a contract with legalese which was nonetheless in violation of state law.

In line with my previous comment, a well-written contract would survive the doctrine of contra proferentem. Many of my answers here on Law SE regarding contract law reflect that contracts with material ambiguities are more common than one would expect. I am personally glad that those ambiguities help the person who was abused by his employer or by his landlord, but that does not change the fact that the drafting of those contracts with all their legalese is incompetent for their vagueness.

As you rightly point out, contra proferentem falls short of solving every imaginable controversy regarding contract interpretation. But in reality the purpose of contra proferentem is to compensate for an uneven balance of bargaining power between parties to a contract.

In scenarios where the parties have comparable bargaining power and therewith their contract was negotiated, contract ambiguities are decided under principles of equity and what the parties' knowledge & expectations were or reasonably should have been at the time of forming the contract and thereafter. This means that the legal outcome ought to be that one which is most consistent with a reasonable notion of fairness.

Answer 3

People who have done it before have an idea of what they want. Nothing is perfect, but if you write contracts for x every day, through experience, you will see that you liked or didn't like the outcome of each part.

Each industry normally has a set of standards or ways of going about things too.