A lack of clarity can come back to bite you

As a long time Gooner I have found myself drawn into the (set to be) long running saga of the Luis Suarez transfer.

Aside from the football related aspects it’s the contractual point that interests me.

There appears (at least according to the press) to be some uncertainty over a key clause.  One side, Luis’ side, feels the words of the clause in question compel Liverpool to sell Suarez if an offer of more than £40m is made.  There is a variation on this interpretation that is that the £40m+ offer compel Liverpool not to sell but to allow the player to talk to the team making the offer.

And the last interpretation is that the clause merely compels Liverpool to inform Suarez of the offer but does not compel them to allow him to speak to the club who mad the offer.

If you favour either of the first two interpretations (and especially the first one) then you would make an offer of just enough to trigger the outcome you are seeking wouldn’t you? An offer of say £40 million plus £1. Now who would do that? What could they be smoking?

Leaving aside any discussion of what is or isn’t being smoked, one could say that the Arsenal offer was over generous if “triggering the clause” was the objective… £40m and 1p would have done. But hey, we’re like that .generous to a fault. And if questions are to be raised about being under the influence, some more serious questions could be asked of our friends from the North in relation to the acquisition of Andy Carroll , Jordan Henderson , Stuart Downing …the list goes on. Some have even suggested that the extra £1 in Arsene’s offer was, indeed, for Mister Downing.

But, moving on from the banter…non lawyers will express disbelief that there isn’t clarity over such an important clause in a contract.  Lawyers and those with legal training (like many of us at TC) will however know that a lack of clarity in a legal document is completely believable. Regardless of whether such a lack of clarity actually exists in the Suarez contract.

I have seen many trusts and wills where it is far from clear what the effect or outcome of a clause should be.  The intention may have been clear but the articulation is less than perfect.  After all, “it’s only words” – as the Bee Gees sang.  Not that I am a Bee Gees fan – or a fan of unclear drafting.

And it’s not just private documents that suffer from a lack of clarity.  Legislation also suffers from a divergence in what is stated by the words from what Parliament’s intention was.  That’s why so many avoidance schemes have been so successful.  They have worked to achieve an outcome that wasn’t intended by Parliament but was not prevented by the mere words of the legislation.  And that’s why we have had a steady flow of litigation involving HMRC attempting to secure a “purposive” (ie less than strictly formally legal) interpretation of legislation and, of course, the General Anti Abuse Rule that will operate, broadly speaking, to apply the intention of Parliament in cases where there has been abuse (as defined within the GAAR).

The lesson coming from the Suarez case (that may itself, it seems, go to some form of arbitration) is one that anyone involved in composing the terms of a private trust or will, would do well to observe.  Ensure that what you mean to achieve is expressed clearly by the words of the legal document you are to use.  Clear in a way that is beyond confusion.  Setting out, in some way, a plain English intention before using the necessary legal words in the document, a kind of “recital” or “narrative” may also be helpful – if only to concentrate the mind on the job at hand.

It will save a lot of trouble down the track.

If only the legal team advising Pep’s brother had worked to these principles – we may have had Luis in the team for our first shot at a trophy this weekend. OK, it’s the Emirates Cup … but beggars can’t be choosers!