Understandable language enhances the delivery of the message intended to be conveyed. The disconnect and deficiencies of contracts and other legal documents created by overly complex and ambiguous wording often becomes apparent when a claim is made by an aggrieved party. In such instances, not only does the overly complicated wording of the contract impede the ability to understand the agreement, it also makes the contract practically difficult to implement.
Where contracting parties have found themselves in legal disputes, recent case law has indicated the courts’ move towards a purposive approach, meaning that greater consideration is given to the intended context rather than the meanings of individual words in legal documents. As a consequence, the reliance on ambiguous and complicated wording no longer serves an advantage. Given the legal framework under which contracts and other legal documents are considered, it has become very important for drafters to ensure that they achieve the balance between drafting a contract that is easily understood by the parties and drafting a contract that contains the necessary provisions required for the agreement to be binding and effective under law.
In pursuit of achieving this delicate balance, understanding the purpose of understandable language is key. However, determining whether a contract is in plain language cannot be done in isolation; and will always be dependant on the audience. A plain and understandable agreement will be one that has carefully analysed the purpose of the document while determining the most appropriate manner to communicate the intended message. A consideration of existing South African legislation, policies and guidelines indicates that plain understandable writing is no longer simply good practice but a requirement in law. Some of the legislation which requires the use of plain understandable language in contracts include:
The South African National Credit Act, No. 34 of 2005 which makes provision for a consumer’s right to information in plain and understandable language. The Act requires the use of language to be understood by an ordinary consumer, with average literacy skills and minimal credit experience.
the Consumer Protection Act, No. 68 of 2008 which dictates the manner in which consumer contracts should be drafted by providing that a supplier must ensure that a consumer agreement is in ‘plain and understandable language;
the Short-term Insurance Act, No. 53 of 1998 and the Long-term Insurance Act, No. 52 of 1998 makes provision in the rules and regulations for representations and information to policyholders to be in plain language that avoids uncertainty or confusion and is not misleading. Recent caselaw has demonstrated the difficulties faced by insurers when confronted with litigation that considers the language used in insurance contracts against the context and purpose of such agreements.
In terms of the Companies Act, No. 71 of 2008, prospectus, notices, disclosure or documents required in terms of the Act must be published, produced or provided to potential investors, company creditors, holders of security, representatives and employees in plain understandable language.
When certain information is conveyed, various policies and regulations require that service providers undertake to give information on their products and services in plain language. These include:
the Code of Banking Practice which provides that the Banking Association must undertake to give information on products and services in plain language and ensure that all written terms and conditions are fair and clearly set out the Consumer’s rights and responsibilities in plain language.
A guideline document drafted by the Financial Services Board (the Treating Customers Fairly Roadmap) which regards the use of plain language as an integral part to ensuring fairness to customers of financial services firms.
The simplicity of the language used in agreements is increasingly becoming important from both a legislative and policy perspective. The space for overly complicated language in legal writing has narrowed dramatically. To keep up with the reform, drafters need to reassess their document design and ensure that their agreements have carefully balanced the importance of drafting an agreement that is binding and enforceable as well as the importance of drafting an agreement that is written in understandable language.
This article was prepared by partner Bianca Da Costa and candidate attorney Catherine Hendriks.
ENDS
https://www.fasken.com/en/knowledge/2022/02/25-enough-with-the-gobbledygook
