Defining terms is a widely used technique in contract drafting. Arguably, definitions make contracts shorter and clearer, because there is no need to re-define a term at multiple places and because it ensures consistency of interpretation across the contract.
Defined terms are usually capitalized to alert the reader. Their definitions are either included in a central glossary (in the first article of the contract or an annex) or in the body of the clause using the defined term.
All of this is based on good intentions, but the road to hell is paved with good intentions and contract definitions went happily down this road.Continue reading