hierarchical clause model?

[Jason Harrop <jharrop@speedlegal.com>]

Hi

Here is some material which might get us started on our clause model 
discussions.

cheers,

Jason



The basic alternatives defined
------------------------------

There are three basic ways to model the clauses in a contract:

1.  Non-hierarchical

In this model, the blocks of text in the contract are modeled using a
flat structure, with an attribute (eg level) which tells you what level
the block is on.

I'm using the word "block" here in an attempt to avoid using
semantically charged words like "paragraph" or "clause".

2.  Hierarchically Named Blocks

In this model, the blocks of text are nested within one another,
matching the structure of the document.  Each level of container has its
own name.

3.  Hierarchical Recursive Blocks

In this model, the blocks of text are nested within one another,
matching the structure of the document, as is the case for the
"Hierarchical Named Blocks" model.  The difference here is that there is 
only one container name, which is used at each level.

Commentary
----------

The non-hierarchical model is unsuitable, because it encodes document
structure in an unnatural way.

The choice between the two hierarchical models probably comes down to
whether there is any consensus for the names of the blocks.

Summary of Discussion points
----------------------------

1. There appears to be support in U.S.A. for "Hierarchically Named 
Blocks" which start Article, Section, Paragraph.  (I believe this 
hierarchy was suggested by Rolly in July or August 2000.  Rolly's 
hierarchy continued with Subparagraphs and Clauses)

2. Elsewhere than the U.S.A (I looked at UK and Australia) there is 
little support for 'article'. In Australia, we tend to use 'clause' to 
refer to the blocks irrespective of their level in the hierarchy, but 
will also occasionally use a top level of 'Part'.

3. So assuming Article/Section/Paragraph is acceptable to US lawyers, 
the question is whether other jurisdictions could live with it as well?

4. If we did run with Article/Section/Paragraph, what would we call the 
lower levels, and how many lower levels would be necessary?

Discussion
----------

Lawyers have to give these blocks a name, such as "articles", "clauses", 
or "paragraphs", in two main situations:

1.  In the text of a contract:

	(i)	Where the thing is explicitly named eg "Part I - Preliminary" or 
"Article 3.  Termination"

	(ii)	When making a cross-reference.

	(iii)	In the interpretation clauses ("a reference to X, Y, or Z is a 
reference to X, Y, or Z of this agreement")

2.  When applying a style in their word processor

So we can look to see what consistency there is.


Contract text analysis - Google
-------------------------------

I conducted various searches in Google, to try to determine how 
frequently the following words (and in some cases their plural) were 
used: part, clause, article, section, paragraph, sub-paragraph, 
subparagraph, sub-clause, subclause, sub-article, subarticle, schedule, 
attachment, annexure, item

I tried to restrict the search to contracts by conducting the searches 
twice.

The first time, I searched for the word (eg 'article') in conjuction with

	contract signed OR executed

For this search family, I looked at occurences of 'paragraph', 'in 
paragraph', 'under paragraph', 'pursuant to paragraph', and 'this 
paragraph'.

A search on just 'contract signed OR executed' returns 2.53 million hits 
(or 159,000 if you restrict the search to just filetype doc).

The second time, I searched for the word in conjunction with

	"this agreement"

A search on "this agreement" returns 1.69 million hits.


The findings were as follows:

- the words 'paragraph' and 'article' are about equally popular

- the word 'clause' is slightly less popular overall than 'paragraph' or 
'article', however it is more popular in com.au, gov.au, and co.uk

- 'article' is especially popular in the .com and .gov domains.  In the 
co.uk and com.au domains, article is hardly used

- 'section' is more than twice as popular than any of 'article', 
'clause' or 'paragraph', used in 701,000 of the documents in the second 
search family, and not used in 1,080,000.

- since there were 1.15 million docs in the second search family in the 
.com domain, it is interesting that slightly more than half of them do 
not use either of the words 'section' or 'article'.  These docs which 
don't use the word 'section' or 'article', only rarely use 'clause' or 
'paragraph', so unless i have completely missed some important block 
word, it seems likely that they are simply silent

- 337,000 of these usages of 'section' were in .com domain.  In most of 
those documents (271,000), the word 'article' is not used!  (I did 
inspect several document to confirm they were in fact agreements)

- 'subclause' is about an order of magnitude less popular than 
'paragraph', 'article' or 'clause' (depending on the domain)

Contract text analysis - Interpretation Clause
-----------------------------------------------

I've attached below extracts from the interpretation clauses of various 
contracts i came across.  It shows some of the variability we are 
dealing with, but isn't intended to indicate what is or is not popular.


Word processor styles
---------------------

Unfortunately, all the contracts in Word format which I looked at tended 
to use "Heading 1", "Heading 2" styles, rather than "Clause" or 
"Article", which if anything, indicates how little lawyers think about 
what to call these blocks!!


--------------------------------------------------------------

SAMPLE CLAUSES
--------------

Reference to Recitals, Articles, Schedules, Appendix, Clauses, 
Sub-Clauses or Annexures shall, unless the context otherwise requires, 
be deemed to include the Recitals, Articles, Schedules, Appendix, 
Clauses, Sub-Clauses or Annexures of this Agreement. 

1.5	reference to Clauses Schedules and Recitals are references to 
Clauses Schedules and Recitals of this Agreement and references to 
sub-clauses paragraphs and sub-paragraphs are unless otherwise stated 
references to sub-clauses of the Clause or paragraphs of the sub-clause 
or Schedule or sub-paragraphs of the paragraphs in which the reference 
appears;
The division of this Agreement into Articles and Sections and the 
insertion of a table of contents and headings are for convenience of 
reference only and do not affect the construction or interpretation of 
this Agreement. The terms "herein", "hereof", "hereunder" and similar 
expressions refer to this Agreement and not to any particular Article, 
Section or other portion hereof. Unless something in the subject matter 
or context is inconsistent therewith, references herein to Articles, 
Sections and Schedules are to Articles, Sections and Schedules of this 
Agreement.
Article and section headings are for convenience only and shall not 
affect the interpretation of this
Agreement. References to articles, sections and appendices are, ?

Save where expressly otherwise provided, a reference in this Agreement to a
numbered clause is a reference to the clause bearing that number in this 
Agreement
and a reference to a numbered paragraph is a reference to a paragraph 
bearing that
number in the clause in which the reference occurs

references to clauses and Schedules are to the clauses and Schedules of 
this Agreement and references to paragraphs are to paragraphs in the 
Schedule in which such references
appear

d. the headings to the paragraphs are for ease of reference only and 
shall not affect the Interpretation or construction of this agreement

1.PARAGRAPH HEADINGS. The headings of particular paragraphs and 
subparagraphs are inserted only for convenience and are not part of this 
Agreement and are not to act as a limitation on the scope of the 
particular paragraph to which the heading refers.
References herein to Articles, Sections, Exhibits and Schedules shall
be deemed to be references to Articles and Sections of, and Exhibits
and Schedules to, this Agreement unless the context shall otherwise
require.
(c)
The headings of the Articles, Sections, Exhibits, Appendices and
Schedules are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of
this Agreement

1.3.6 a reference to an article, section, provision or schedule is to an 
article, section, provision
or schedule of this Agreement

reference to an annexure is to an annexure to this Agreement. A 
reference to a part, clause or other subdivision is a reference to a 
part, clause or other subdivision of this Agreement;

3. In this Agreement, unless a contrary intention appears:
(a) a reference to a Part is a reference to the relevant Part of this 
Agreement;
(b) a reference to a clause is a reference to the relevant clause of 
this Agreement;
(c) a reference to a sub-clause of the clause in which the reference 
appears, or of such other clause as the reference indicates, is a 
reference to the relevant clause of this Agreement; and