Over time contract templates will inevitably accumulate what I call “barnacles” — ad hoc responses to historic situations, anecdotal reactions to unexpected risks, flannelesque flourishes to placate a truculent or obtuse or just downright stubborn counterparty — no-one likes them, but if your client insists on redundant (or misconceived) terms (“for the avoidance of doubt”; “without limitation” — that kind of thing) the pragmatic response is to agree them and move toward execution.

These barnacles have a habit of finding their way into, and encrusting, negotiation templates. And, as people move on, their original justification — if there even was one — becomes lost to time. The instinct of successive risk controllers, short an option as they are, upon encountering them will be, “I don't know why that is there, but whoever put it in must have had a reason[1], so the safest thing is to leave it there.”

This will lead to complexity in templates, additional length of templates and a proliferation of different templates.

  1. Not necessarily so. Just as likely to be misconception. As to which, see indemnity.