Jul 21

Legal English in Focus: Liquidated Damages Clauses

English Language Training, Language Training Courses, Legal English Training Courses No Comments »

Legal English is often full of impenetrable terms that make contracts unnecessarily difficult to understand. The role of a legal contract should be to make the terms and conditions of any agreement clear and transparent rather than confusing. This article forms part of our series on Legal English and will shed light on some of the major terms and clauses found in legal contracts.

One clause you may often come across is the Liquidated Damages Clause, but what exactly is it?

Business Writing Viorika Prikhodko i Legal English in Focus: Liquidated Damages Clauses

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In a contract involving two parties, a Liquidated Damages Clause is put into place to serve the best interests of each party and to discourage both parties from breaking the rules of the contract. For example, if Party A fails to uphold their side of the agreement, they must pay a fixed and previously agreed upon sum of money to Party B, who has fully adhered to the agreement.

In this case, Party A is known as the ‘defaulting party’ while Party B is called the ‘non-defaulting party’. Both of these terms will occur frequently in a Liquidated Damages Clause. Importantly, this clause does not aim to punish the defaulting party (Party A) but indeed to compensate the non-defaulting party (Party B).

The courts have developed laws whereby they can control the contents of Liquidated Damages Clauses. The basic rule is: the Liquidated Damages Clause can be enforced if the amount of money to be paid has been estimated prior to the start of the contract, and that this estimate reflects as accurately as possible the loss that would be suffered by the non-defaulting party (the individual or group who sticks to the agreement).

It is important that this estimate is indeed genuine as it will remain fixed in the event that the contract is broken, even if the actual loss suffered is worth more. If the non-defaulting party does actually lose more than originally estimated, they will not be able to sue for their full loss because they are bound to the initial. However, if it is proved that the estimated sum of money was not a genuine reflection of the potential loss suffered, then the non-defaulting party will be able to fully sue for their loss. In this case, the clause would then become known as a ‘penalty clause’. To find out more about penalty clauses read an interesting article in The Student Law Journal entitled ‘Commercial Law’.

One of the principal advantages of this clause is that it helps to avoid uncertainty so it’s really important to master it. It makes each party aware of the consequences that might occur if they do not hold their end of the bargain. Mastering the Liquidated Damages Clause however requires an extended knowledge of Legal English. Undertaking a Legal English course will help you to gain a better understanding of the terminology and specific vocabulary used in contracts or legal documents. The skills and knowledge gained in Legal English will improve your confidence and ability to write contracts or legal documents effectively.

According to case law, there is a presumption that it is a penalty when the clause requires a single lump sum to be paid, on the occurrence of several events, some of which may lead to serious damage and other may result in minor damage. Therefore, when drafting a contract in Legal English, it’s essential to distinguish between serious and minor breaches of contract.

Moreover, a clause will held to be a penalty clause if the amount to be paid is “unconscionable and extravagant” compared with the loss that could be suffered as a result of the breach. Courts however will be reluctant to conclude that a clause is a penalty when it has been agreed by commercial parties who are able to protect their interests.

It’s important to emphasise nevertheless that the function of this clause is to fix the amount that must be paid by the defaulting party regardless of the actual loss suffered by the non-defaulting party. This way, if the loss suffered is greater than the amount set out in the clause, the non-defaulting party is not allowed to ignore the clause and sue for the entirety of the loss.

However, if the amount of damages payable under the clause does not constitute a genuine pre-estimate of loss, it will be considered to be a “penalty clause” and will not be enforceable. The aim of a penalty clause is to punish the defaulting party, which is not permitted under English law. Where a clause is found to be a penalty clause, and thus unenforceable, the non-defaulting party can seek to recover his entire loss even if it is more than that provided for in the contract.

The difference between a liquidated damages clause and a penalty clause is based on the intention of the parties when entering into the contract as well as the date on which the parties entered into the agreement rather than the date of the breach. However, what actually happened after the formation of the contract may be important evidence of what could reasonably be expected to be the amount of the loss.

© Communicaid Group Ltd. 2011

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Jul 02

Legal Drafting Courses in English

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When looking for a Legal drafting course in English, it is highly important for any lawyer, paralegal or legal assistant to examine the credentials of the organisation offering the course and also the course content itself. This type of highly specialised course should be delivered by a legal professional who has experience in the field of drafting. The course content should be challenging and needs to cover some of the areas developed in the paragraphs below.

The course needs to focus on a modern style of drafting. This style moves away from the heavy legalese that lay people find extremely difficult to understand. Some examples are as follows:

  • Sentences should be shorter than was previously the case. Instead of drafting long sentences in which one attempts to cover a series of points, it is better to include one point in one sentence; this makes the legal document clearer and easier to read.
  • Legal documents are often weighed down by unnecessary words (verbiage). These superfluous words can lead to problems of interpretation in documents where every word should be drafted for a reason.
  • Two other areas which have been modernised in the interest of plain drafting are: the elimination of double negatives and the watering down of an overly formal style. See here for more information.

When drafting, it is important that the delegate learns certain ‘good practices’ which he/she can refer to whenever a document needs to be drafted. A few examples of ‘good practice’ are the following:

  • Use templates to help drafting contracts, for example. These templates or ‘forms’, ‘standards’, or ‘precedents’ may only require the insertion of a few new details and therefore remove the need to draw up a new contract from scratch.
  • It is also good practice to edit all documents, making sure that what is written is clear. Clauses should be written clearly. In the drafting of retention clauses, for example, it should be explicitly stated that the goods won’t pass to the buyer until the goods have been paid for.
  • Two other good practices are: Latin phrases are often italicised (de facto, inter alia) and abbreviations are written with their full punctuation; unlike in general English, (e.g. and not eg).

Business Meeting 12LajosRepasi i Legal Drafting Courses in English

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It is important that a legal drafting course helps the delegate to analyse the structures that are preferred in legal writing.

Here are a few examples of legal structure:

  • Legal English often uses past participles (existed, sold, bought) and present participles (existing, selling, buying) to make sentences more compact. Instead of ‘the price which is charged for the goods shall be…’, for example, it is better to write ‘the price charged for the goods shall be…’. Instead of ‘The agreement which exists between the parties is due to expire..,’ it is better to write ‘the agreement existing between the parties is due to expire…’.
  • Hypothesising is essential in the field of remedies. It is therefore important that lawyers who need to draft contracts are familiar with the use of the third from of the conditional in English: ‘the loss of the benefits that the third party would have received had the contract been performed’. For the clause: ‘had the contract been performed’ the drafter could also have written: ‘if the contract had been performed’.

In addition to structure, the focus should also be on the terminology used in legal writing. This terminology is specific to legal English and so constitutes a fundamental area of knowledge for any delegate on a legal drafting course in  English. A delegate should be able to understand and use Latin phrases such as ‘ipso facto, pro forma and sui juris’. When drafting contracts in English such terms as ‘offeror’ and ‘offeree’, ‘assignment of rights’ and ‘assignee’ are fundamental. See International Legal English for more examples.

The delegate also needs to know what differences there are when drafting under civil and common law. There are certain common law terms which have no equivalent in civil law. A few examples are: ‘deed’, ‘trust’ and ‘consideration’.

The move towards plain English, however, means that many of these terms will be given up in the interests of clarity. In Common law countries, the idea of ‘judge-made law’ is the tradition (TRIEDEL Dr Volker, from his essay ‘Pitfalls of English as a Contract Language’). This implies that the clauses have to be drafted in a more concrete and precise way as a broadly drafted clause might find itself void though uncertainty.

Common law courts have often interpreted English words and phrases that are not ‘terms of art’ (‘A term whose use or meaning are specific to a particular field of endeavour’) more precisely than in general English and sometimes in a special way. A legal English course such as Drafting Contracts in English should therefore point the delegate in the direction of such books as ‘Words and Phrases Judicially Defined’ by Rowland Burrows.

© Communicaid Group. Ltd. 2010

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Jun 17

Learning Legal English in France

English Language Training, Legal English Training Courses No Comments »

Following a legal English course in France is a training option which should be seriously considered by companies in France. Why send your employees to an English-speaking country such as England or the USA when they can be trained in the comfort of their own offices? Finding a legal English course in France has never been easier now that training companies such as Communicaid offer such flexibility that courses can be adapted to the logistical requirements of the delegate.

Chinese businesspeople 5 Izusek i Learning Legal English in France

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The English language teaching industry is becoming increasingly flexible as a service-provider. It was previously only possible to learn English in certain training centres and these were usually situated in larger towns. After that, immersions became very popular with companies providing the budgets and the time to send their employees to the target language country.

Now, there exists the added possibility of receiving the trainer in your own office, wherever you are in France. This is the ideal choice for professionals who are unable to leave their workplace unattended for long periods of time in order to follow a course. It also brings the trainer into direct contact with the reality of the delegate’s professional situation, therefore providing the trainer with obvious opportunities to adapt the legal English course content to precisely what the delegate requires. Authentic legal materials are at hand and the real-life working environment allows the trainer to experience and ‘feel’ the delegate’s needs.

It is also possible to gain an internationally-recognised legal English qualification in France. The University of Cambridge ILEC (International Legal English Certificate) can be taken in about 13 different examination centres in France ranging from Paris to Marseilles. The TOLES (Test of Legal English skills) can now be taken in Paris with Communicaid.

The quality of a legal English course, whether in France or England, depends essentially on the trainer and such factors as his/her knowledge of the subject matter, experience in the legal profession and ability to transfer knowledge effectively and efficiently. The immersion factor is not so important as the delegate is most probably particularly interested in specific terminology and skills directly related to legal English and not in the additional ‘benefits’ of an immersion course (everyday English terms, idioms, pronunciation differences, slang, cultural experiences, etc). An effective trainer is a mobile trainer who is not necessarily attached to a training room in a certain city. He/she can be flown from London to Paris, for example, to deliver courses on agreed-upon dates.

As pressure on workers’ time increases, French companies will be very interested in the possibility of their employees following an legal English training course in France, delivered by a qualified, experienced legal professional. The increased flexibility of the service provided by the language training industry has brought the training closer to both the delegate’s office and his/her needs and objectives.

© Communicaid Group Ltd. 2010

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