Comparative Civil Procedure and the Style of Complex Contracts

Abstract

Among businessmen and lawyers familiar with commercial practice in complex transactions on both sides of the Atlantic, it is a common observation that a contract drafted in the United States is typically vastly more detailed than a contract originating in Germany or elsewhere on the Continent. My purpose in this paper is to inquire into the causes of that notable difference in the style of contracting. The Belgian legal writer Georges van Hecke discussed this subject in a stimulating paper that is now a quarter-century old. He illustrated the phenomenon with an anecdote. He told of a transaction in which an American company and a European company were planning to affiliate by exchanging shares. The lawyers for the American firm drafted two contracts to embrace the transaction. The combined drafts ran about 10,000 words in length. The European businessman had no prior experience with American lawyers, and when presented with the elephantine American drafts he was so shocked that he nearly renounced the deal. Thereupon it was decided to start over, and the European businessman arranged for his lawyer to prepare a counterdraft. "The result was a document of 1400 words. It was found by the American party to include all the substance that was really needed, and it was readily executed by both parties and adequately performed."