Why do we end contract clauses with semi-colons?

Some drafters end every clause with a semi-colon. The whole contract is one sentence! Why?

At the top of my pet peeves about contract drafting is this— drafters ending every single clause in a contract with a semi-colon! Here’s an example of what I’m talking about:

The entire body of the contract is consisted of clauses like this, one after another.

The body of contracts such as this generally takes this form:

WHEREAS Messrs. A & Co. and Messrs. B & Co. are self-interested commercial entities;

AND WHEREAS the parties have agreed to enter into this contract as they find mutual commercial value in the resulting relationship;

NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS CONTAINED HEREIN AND FOR GOOD AND VALUABLE CONSIDERATION THE RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES HAVE AGREED AS FOLLOWS:

1. THAT the parties do hereby enter into a licensor-licensee relationship, whereby Messrs. A & Co. (the licensor) doth grant Messrs. B & Co. (the licensee) a worldwide, royalty-free, non-exclusive, sub-licensable, and revocable license to use the trademark of Messrs. A & Co. “Flexxxx” in the course of its business as an authorised licensee of the licensor, subject to the condition that the licensee shall continuously abide by the standards of business which the licensor may communicate to the licensee from time to time and failing which the licensor shall not be entitled to the benefit of the license granted herein;

2. AND THAT the parties agree to abide by the other convents, contained in or arising by necessary implication out of, this agreement;

3. AND THAT this contract contains further clauses which have been omitted from this example for the sake of brevity and not confusing the reader which, nevertheless, shall be deemed to continue to be a part of this entire agreement;

IN WITNESS WHEREOF the authorised signatories of Messrs. A & Co. & Messrs. B & Co. are pleased to put their hands hereunder on this Seventh (7th) day of April, Two Thousand and Twenty (2020).

Whew, that’s one long and dense block of text! It’s truly a sight for sore eyes: in the sense that it will make your eyes even more sore! I know this example-contract is a joke substance-wise, but this is exactly how the body of such contracts look.

Breaking Down the Structure

The body of contracts such as this, have 2 characteristic features:

1. Each clause typically, beings with “THAT” and then “AND THAT”, and ends with a semicolon. Each clause is therefore just a big, long, often dense, block of text.
2. Consequently, the entire body of the contract is a single sentence!

Don’t forget, commercial contracts can easily easily run into tens of pages. I hardly need to tell you that, to look at such a dense block of text is itself a huge pain, reading it is worse, and comprehending it for those who make it out alive. It’s a nightmare in terms of readability.

Lawyers (rightly) face enough flak for the complicated language they use in legal documents (including contracts). At every point, every drafter must remember:

The simpler the language of the contract, the lesser the propensity for disputes amongst the parties, the lesser the commercial effort and money wasted on deciphering a contract.

If that’s not in the best interest of our clients, I don’t know what is.

Suggestions for Reform

For example, consider clause 2 of the example-contract above:

2. THAT the parties do hereby enter into a licensor-licensee relationship, whereby Messrs. A & Co. (the licensor) doth grant Messrs. B & Co. (the licensee) a worldwide, royalty-free, non-exclusive, sub-licensable, and revocable license to use the trademark of Messrs. A & Co. “Flexxxx” in the course of its business as an authorised licensee of the licensor, subject to the condition that the licensee shall continuously abide by the standards of business which the licensor may communicate to the licensee from time to time and failing which the licensor shall not be entitled to the benefit of the license granted herein;

For a start, let’s transform this into a sentence. Then it looks like this:

2. The parties do hereby enter into a licensor-licensee relationship, whereby Messrs. A & Co. (the licensor) doth grant Messrs. B & Co. (the licensee) a worldwide, royalty-free, non-exclusive, sub-licensable, and revocable license to use the trademark of Messrs. A & Co. “Flexxxx” in the course of its business as an authorised licensee of the licensor, subject to the condition that the licensee shall continuously abide by the standards of business which the licensor may communicate to the licensee from time to time and failing which the licensor shall not be entitled to the benefit of the license granted herein.

It’s still quite a long and dense block of text, difficult to comprehend. Let’s break this up into multiple sub-clauses, and add a heading for convenience. Then it may look something like this:

2. Grant of License:

2.1. The parties hereby enter into a licensor-licensee relationship.

2.2. Messrs. A & Co. (the licensor) grants Messrs. B & Co. (the licensee) a worldwide, royalty-free, non-exclusive, sub-licensable, and revocable license to use the trademark of Messrs. A & Co. “Flexxxx” in the course of its business as an authorised licensee of the licensor.

2.3. The licensee, whenever it uses the trademark “Flexxxx” in the course of its business, shall continuously abide by the standards of business which the licensor may communicate to the licensee from time to time.

2.4. The licensor shall not be entitled to the benefit of the license granted herein whenever it does not comply with the conditions arising out of Article 2.3.

Whew! That’s so much easier on the eyes, and easier to read and commitment.

To sum up, for drafters who still make clauses a long and dense block of text beginning with “THAT” or “AND THAT” and ending with a semicolon, here are my suggestions for you:

1. For God’s sake, don’t make the entire body of the contract a single sentence. Break up each of the clauses into complete sentences.
2. Break up each of the clauses into a number of sub-clauses. It increases readability.
3. Put a heading to every clause. In contracts that run into pages, it’s a life-saver in terms of readability!

Let’s draft more readable contracts. It saves effort and money, and reduces the possibility of disputes.