I recently received a “carve out” agreement to review. It started as follows:
THIS STANDARD CARVE OUT AGREEMENT (the “Guaranty”) is made as of ____________, 2022 (the “Effective Date”) by ___ , an individual resident of ___ (“Guarantor”), with a business address of INSERT, in favor of ——Institution for Savings, a Massachusetts chartered Bank, and its successors and assigns (“Lender”), with a business address of ————, MA, Attn: Loan Processing. WITNESSETH Lender has agreed to make a loan (the “Loan”) to ________ (“Borrower”), which Loan is evidenced by that certain Promissory Note, dated as of the Effective Date, made by Borrower and payable to the order of Lender in the maximum original principal amount of _____________________ Dollars (U.S. $____,000.00) (the “Note”) and made pursuant to the terms of that certain Commitment Letter, dated ____ , between Borrower and Lender (the “Commitment Letter”).
It then went on for another seven pages, single-spaced, of similar language. I had no idea what it meant. I was familiar with guaranties, but not “carve out” agreements. When I asked for an explanation, I was in turn asked what provision I didn’t understand. What I wanted was a plain English explanation of the whole document.
I’m Not the Only One
It turns out that I’m not alone as a lawyer who doesn’t like legalese. According to a recent study by Eric Martinez and Edward Gibson of MIT and Francis Mollica of the University of Edinburgh, “Even lawyers do not like legalese,” lawyers don’t like legalese any more than laypeople, though they do understand it and retain its meaning better. “No matter how we asked the questions, the lawyers overwhelmingly always wanted plain English,” says Edward Gibson, an MIT professor of brain and cognitive sciences and the senior author of the study. “People blame lawyers, but I don’t think it’s their fault. They would like to change it, too.”
One feature of legalese is that is often “center embedded,” meaning that legal texts often contain long definitions inserted in the middle of sentences. This can make them difficult to to understand.
Why Do We Keep Doing It?
So, why do lawyers write in legalese if they don’t like it either. The researchers tested five hypotheses:
- That lawyers are so familiar with legalese that they don’t realize they’re using it.
- That they’re simply copying and pasting from prior documents.
- That they want to sound “lawyerly.”
- They want to maintain their monopoly by making documents impenetrable by non-lawyers.
- That legal concepts are so complex that they compel complicated language.
The study, according to its authors, rules out all these explanations except for the second, that they’re copying and pasting from prior documents that they know are enforceable. They become more complicated and longer as attorneys revise prior language to fit new situations or to cover problems that may have occurred with existing documents. According to a press release from MIT, the research team is looking into this question now:
“Maybe an original contract was written for one set of people, and if you want it to be more restricted, you add a whole new definition of that restriction. You can add it within a sentence, and that ends up being center-embedded,” Gibson says. “That’s our guess. We don’t know the details of how, and that’s what we’re working on right now.”
This is no surprise to us lawyers. Here are a couple of blog posts I’ve written on the topic:
Why Are Legal Documents So Long?
Why Are Durable Powers of Attorney So Long?
If It’s Not Broke, Don’t Fix It
Lawyers are trained to be conservative and to do everything they can to avoid liability, both for their clients and themselves. Using existing legal language is relatively risk-free. It’s worked in the past and, if it doesn’t for some reason, it’s not the lawyer’s fault. Revising the existing language is risky. It may not work for some reason, which could hurt the client, and then the lawyer will be blamed for altering tried and true documents. It’s safer to use existing legalese, even if it’s difficult to understand.
Of course, there’s also the laziness factor. It’s easier to copy and past old language and takes more effort to revise it or start from scratch. Along with this is the matter of cost. To the extent lawyers charge by the hour, if they can save time and cost by copying and pasting, their clients should be happy — even if they don’t understand the documents themselves.
