Three Contract Drafting Lessons: Courts Keep Teaching (And We Keep Forgetting)

by Tracy Work

If you’ve ever read a contract clause and thought, “I know what this means,” congratulations. You’ve likely just identified the moment where things tend to go sideways.

Contracts are supposed to prevent disputes. But an alarming number of them cause disputes, not because the parties acted in bad faith, but because the words on the page left too much room for disagreement. The drafting choices that seem harmless at 2 a.m. on a deal deadline (a fuzzy term here, a missing definition there, a comfortable, “best efforts,” dropped in for good measure) are exactly the choices that generate lawsuits, arbitrations, and very expensive arguments about what everyone really meant.

What follows are three drafting lessons drawn from landmark cases and leading scholarship. Whether you’re a transactional attorney building templates or a business professional reviewing a vendor agreement, these are worth keeping close.

1. Ambiguity Costs the Drafter, Every Time

There’s a centuries-old doctrine called contra proferentem, and it operates like a penalty flag on the drafting team: if a contract provision is ambiguous, courts will interpret it against the party who wrote it.

The U.S. Supreme Court applied this rule in Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52 (1995). Shearson Lehman’s standard client agreement contained a choice-of-law clause that pointed to New York law and a separate arbitration clause governed by federal law. The two provisions didn’t play nicely together, and the resulting ambiguity about whether arbitrators could award punitive damages had to be resolved. The Court resolved it against Shearson, the party that had drafted the agreement.

The principle is straightforward and codified in the Restatement (Second) of Contracts § 206: when language is susceptible to more than one reasonable reading, the meaning that works against the party who supplied the words is generally preferred.

Why this matters beyond the courtroom. If you’re the one putting pen to paper, the interpretive risk sits squarely on your side of the table. That clever shortcut you took to avoid a difficult negotiation? It may read very differently to a judge who wasn’t in the room.

The practical takeaway: Write short, declarative sentences. Test each provision by asking, “Could a reasonable person read this differently than I intend?” If the answer is yes, rewrite until it isn’t. The few extra minutes spent clarifying language are always cheaper than the alternative.

2. If You Don’t Define It, a Court Will, and You May Not Like the Result

Every first year law student encounters Frigaliment Importing Co. v. B.N.S. International Sales Corp., 190 F. Supp. 116 (S.D.N.Y. 1960), and for good reason. Judge Henry Friendly opened with one of the most memorable lines in contract law: “The issue is, what is chicken?”

The buyer assumed “chicken” meant young broilers suitable for frying. The seller understood it to mean any bird of the genus, including older stewing chickens that cost significantly less. The contract never defined the term, so Judge Friendly spent an entire opinion sifting through dictionaries, USDA regulations, trade customs, and the parties’ negotiation history to figure out what “chicken” was supposed to mean.

The case has become shorthand for a simple truth: an undefined term is an invitation to litigate.

You might be thinking, “Sure, but my contracts are more sophisticated than a chicken deal.” Fair enough, but the same problem surfaces constantly in technology and procurement agreements. What exactly does “Software” include: the base platform, custom configurations, third-party components, future updates? What constitutes “Acceptance”? When a contract says, “Deliverables,” does that include documentation, training materials, and source code, or just the compiled application?

These aren’t hypothetical questions. They’re the questions that get asked in depositions.

Kenneth A. Adams addresses this directly in A Manual of Style for Contract Drafting (ABA, 5th ed. 2023), devoting an entire chapter to the mechanics of defined terms. His core advice: define every term that carries contractual weight, place definitions where they’re easy to find, and never assume that a word’s everyday meaning will survive a legal challenge.

The practical takeaway: Build a definitions section and treat it as load-bearing structure, not boilerplate. Every capitalized term in your agreement should trace back to a clear, bounded definition. If you find yourself thinking, “Everyone knows what that means,” that’s exactly the term that needs defining.

3. “Best Efforts” Doesn’t Mean What You Think It Means

Few contract phrases get used as casually, or as dangerously, as “best efforts,” “commercially reasonable efforts,” and “reasonable efforts.” Drafters often treat these as a tidy hierarchy, assuming that “best efforts” imposes the heaviest obligation and “reasonable efforts” the lightest. It feels intuitive. It’s also wrong.

Kenneth A. Adams dismantled this supposed hierarchy in his landmark article, Interpreting and Drafting Efforts Provisions: From Unreason to Reason, 74 Bus. Law. 677 (2019), published in the ABA Business Law Section’s journal. Through a comprehensive review of the caselaw, Adams showed that courts have been wildly inconsistent in distinguishing among these formulations. The reason is conceptual: requiring a party to act more than reasonably is itself an unreasonable standard. What does a court do with an obligation that demands efforts beyond what a reasonable person would undertake? In practice, courts tend to collapse the distinctions and apply a general reasonableness test regardless of which modifier appears in the contract.

The Delaware Court of Chancery recognized the significance of this analysis, calling the article the most thorough treatment of efforts clauses available and Adams the leading commentator on the topic.

For an earlier judicial take, consider Bloor v. Falstaff Brewing Corp., 601 F.2d 609 (2d Cir. 1979), where Judge Friendly (yes, the same Judge Friendly from the chicken case) evaluated a “best efforts” obligation to promote a beer brand. Rather than trying to define “best efforts” in the abstract, Friendly anchored the standard to something concrete: what a prudent comparable brewer would have done under the same circumstances. In other words, an objective benchmark.

And that’s the key insight. The problem isn’t the word “efforts”; it’s the absence of anything measurable next to it.

A clause that says, “Vendor shall use best efforts to deliver on time” gives a court almost nothing to work with. A clause that says, “Vendor shall use reasonable efforts to deliver by the scheduled date, including maintaining a project team of no fewer than five full-time engineers and providing weekly written status reports” gives the court, and the parties, a clear yardstick.

The practical takeaway: Stop debating whether to use “best,” “commercially reasonable,” or “reasonable.” Pick “reasonable efforts,” the most analytically sound formulation, and then do the real work: define and articulate what those efforts actually look like and entail. Specify milestones, minimum resource commitments, reporting obligations, or escalation procedures. The benchmarks are where the enforceability lives.

The Common Thread

If there’s one theme running through all three of these lessons, it’s this: courts enforce what is explicit and decline to rescue what the drafter left vague. Whether the gap is an ambiguous clause, an undefined term, or a bare efforts obligation with no measurable standard, the judicial message is remarkably consistent: precision protects; ambiguity punishes.

The good news is that these are fixable problems. They don’t require exotic legal theories or cutting-edge drafting technology. They require discipline, attention, and a willingness to slow down long enough to ask: “Is this provision clear enough that a stranger, someone who wasn’t in the negotiation, who doesn’t share our assumptions, would understand exactly what it requires?”

If the answer is no, keep on drafting.