How did contracts get to be so complex?
Most consumer contracts were adapted from "boilerplate," or catchall commercial contracts between big companies. When enormous sums of money are at stake, there may be a rationale for using language that protects the institution from any and all contingencies. But boilerplate gives no consideration to the rights of the consumer. A contract is supposed to be a two-way understanding in which both parties know what's expected of them. These documents are produced unilaterally by the institution and given to the consumer with the stipulation: "Sign here."
Basically, what is a simplified contract?
It is understandable to the people who use it and it clearly defines for the parties their rights and obligations. The problem in the past has been that most contracts were written by lawyers for lawyers. Now there's a demand for contracts for the general consumer.
What does this involve?
We are trying to make contracts more comprehensible to the consumer. To accomplish this we reorganize the material, incorporate definitions into the body of the text, so the consumer doesn't have to flip back and forth from section to section, and offer examples to explain complex legal or actuarial terms. We use personal pronouns such as "you" and "we," shorter sentences and active instead of passive verbs. Finally, we try to put a little grace into our writing—anything to break the tedium.
What contracts can be simplified?
There are virtually none that can't be. The consumer agreements we have simplified include consumer loan notes, insurance policies, installment plans, credit card applications, leases, rental agreements and warranties.
Is simpler always shorter?
No, that's a big misconception. Brevity does not always equal clarity. Generally speaking, consumer credit contracts tend to be shorter. On the other hand, insurance policies in the life and casualty area tend to be 20 percent longer. If you really want to communicate, you have to explain things you are not legally required to do.
In simplifying contracts, what's the easiest part to eliminate?
The long sentences and extraneous words. From the standpoint of dealing with lawyers, we have had very few problems with that.
What have been the most difficult provisions to eliminate?
Certain clauses in life insurance policies. Many financial documents with footnotes, such as annual reports and security prospectuses, are difficult too.
Can you give some examples of simplified terms?
In an insurance contract we will use the personal pronouns we, our and ours to mean the insurance company, or what has often been called "the party of the first part." You, your and yours are used to designate the person insured, "the party of the second part." We replace "herein before" with "above." And the "aggregate limit" can be changed to "total."
Aren't you oversimplifying contracts that must stand up in court?
Not at all. But that's where lawyers take potshots at us. They equate simplified with simpleminded. We say that a contract is something you have to read with a lot more attention than a newspaper. We try to avoid "Dick and Jane" language—short, choppy sentences with one-syllable words that can antagonize the reader and be as unclear as wordy sentences.
Have any of your simplified documents ever been challenged in court?
Not yet. But I'm interested in how the judiciary will respond to the whole concept. If an institution makes a good-faith effort to simplify, the transaction should have a better chance to stand up in court.
Have you ever uncovered ludicrous contract pro visions?
We once simplified a pension plan for one of the top 10 companies in the world. The executives who saw the simplified version said that if their employees read it, they would all quit—plain English had exposed the plan as miserable. So they ripped up our draft and abandoned the project. We also found language in one loan agreement that would have allowed the bank "forcible entry" into a borrower's home to recover security for an overdue loan. The way it was worded made the bank action essentially breaking and entering, which of course is illegal. The clause was deleted.
Is the trend toward plain English a product of the consumer movement?
Yes, plus others. The consumer movement focused attention on the whole issue of how corporations deal with their customers. It has raised the public consciousness level and convinced people that they shouldn't accept things on blind faith, that they can make demands and that it pays to be more discriminating. Both corporations and the government have suffered credibility problems in the last few years. There are real benefits in communicating with the public in a more open and effective manner.
How does this help business?
It's proof that you have nothing to hide, that you are really interested in communicating honestly with your customers. It cuts down on the number of inquiries that come into an office, and that translates into a lot of dollars.
But don't corporations expose themselves to risks when they simplify?
I don't think any business has to give up legal protections in order to simplify. The main consideration is that whatever protection, rights and remedies a corporation wants, they should be put in terms that are understandable to the consumer.
What about technical words?
There is no way you can write a real estate or other financial agreement without some technical words. If you have to use a technical word that may be unclear, explain what it means by definition or example.
You are critical of the legal profession. Why?
Because the American Bar Assocition and law schools have been totally unresponsive to the logic and need for simplified contracts. I think the law should be comprehensible not only to those who work with it but also to those who are governed by it.
Do you support legislation to force simplified contracts?
Yes. I think there is a real need for such laws, because without them most lawyers would continue to work and write the old way. I am very much in favor of the "Plain English" law in New York, which gives business an opportunity to experiment in what is essentially a new field. But I don't like laws, such as the Truth-in-Lending law, which attempt to list every requirement and go into extreme detail.
Are you doing any work for the federal government?
We've just undertaken a program with the Department of Agriculture's food stamp project to simplify their forms so they will be easier for people to deal with. We are also working with the Interstate Land Sales group at HUD on their regulations, and we have just signed a contract with the General Accounting Office to draft some simplified versions of the 1040 income tax form. Even though the IRS has done some work on it, the 1040 is still a long way from being what I would call a simple document.
"Everyone benefits, "proclaimed President Jimmy Carter when he signed an executive order seven weeks ago directing that federal regulations be written in clear and simple language. "Nobody will suffer, except the people who sell typewriter ribbons." One language expert who concurs is Alan Siegel, president of a New York consulting firm and the nation's leading advocate for taking the legalese out of contracts. Four years ago Citibank in New York, the country's second largest bank, asked Siegel to redesign its consumer loan note. "I can make it look pretty," he told Citibank officers, "but it's still going to read ugly." Siegel rewrote the loan form using language the layman could understand. Since then he has simplified contracts for dozens of companies, including American Express and Blue Cross-Blue Shield. Partly because of his efforts, New York State last year passed a landmark "Plain English" law aimed at legal documents. Siegel, 39, who graduated from Cornell and spent 18 months at NYU law school, lives in Manhattan with his wife, Gloria, their daughter Stacey, 8, and godchild Cookie, 15. He recently talked with Andrew D. Gilman for PEOPLE.