Clause Library, Clause Book, Clause Bank, Clause Set… What’s in a Name?
When a lawyer is negotiating a contract and accessing their existing clauses, do they call it a clause library, clause book, clause bank, clause set, or something else entirely?
We asked members of the legal community this exact question and while there was some consensus, it was clear that these terms can be somewhat interchangeable and that it often comes down to personal preference.
To shed light on these terms and any subtle distinctions between them, we thought it best to offer a definition of each and add some of the insights we collected from lawyers at law firms, in-house counsel, and legal operations professionals.
We conducted our research four ways:
In a social media poll
In discovery calls with clients and prospects
With a search engine optimization (SEO) tool
Asking ChatGPT, an artificial intelligence (AI) tool
Let’s look at each term, offer a specific definition, its current web traffic and any color commentary from our network.
Polling our community
As a software company building legal tools, it’s important to us that we use the same language that our customer use when we are referring to a feature. We wanted to determine if there was a popular choice among these terms that lawyers use.
While it’s hardly a scientific approach, the first thing we did was poll our community, from our Founder Martin Ertl’s LinkedIn account. The poll received 36 votes, and we should disclose that while Martin’s network is somewhat diverse, it does skew toward in-house counsel and legal operations professionals.
The results indicated that there was a frontrunner, but it was also clear that there was no consensus:
Since clause library was the winner, we’ll take a look at it first.
Clause library also gets the most searches per month.
Clause Library
Oddly enough, there is no definitive source for such terms, and a Google search turns up articles by other software companies. To help define these terms objectively, we turned to the most impartial source we could think of, ChatGPT.
Here’s what it had to say about the definition of clause library. Our prompt was simple: You are a lawyer. What is a clause library?
We used the same prompt for all the terms below and made only minor edits, including removing any redundancy.
ChatGPT says…
A clause library is a collection or database of standard contract clauses or provisions that are commonly used in legal documents. It serves as a resource for lawyers and legal professionals to access pre-drafted and standardized language for various contractual situations.
A clause library typically includes a wide range of clauses that cover different legal areas such as contract formation, termination, dispute resolution, indemnification, confidentiality, intellectual property, and more. These clauses are carefully drafted to address specific legal issues and provide clarity and protection to the parties involved in a contract.
The purpose of a clause library is to save time and effort in drafting contracts from scratch. Lawyers can refer to the library to find pre-drafted clauses that are suitable for their clients' needs. They can then modify and tailor these clauses to fit the specific circumstances of the transaction or agreement they are working on. This helps ensure consistency, efficiency, and legal accuracy in contract drafting.
Clause libraries can be created and maintained by law firms, legal departments of organizations, legal publishers, or legal technology companies. They are often updated regularly to incorporate changes in laws and regulations or to address new legal developments.
“Fall-back position” is an interesting one, and we had not considered it. Of all the others listed here though, it sounds the least like a feature of a software product, so we are setting it aside.
Clause book gets a mere 30 searches per month, but its “difficulty” suggests that there are a lot of articles competing for that web traffic.
Clause Book
The term clause book came up a lot in our research. Let’s take a deeper dive and see what distinctions the robots make about its definition.
ChatGPT says…
A clause book, also known as a precedent book or a drafting guide, is a resource that contains a collection of standard or model clauses commonly used in legal documents such as contracts, agreements, or statutes. It serves as a reference tool for lawyers and legal professionals to facilitate the drafting and preparation of legal documents.
A clause book typically includes a wide range of pre-drafted clauses that cover various legal topics and provisions. These clauses are often drafted in a standardized and precise manner, reflecting commonly accepted language and legal principles. They can be customized and adapted to suit the specific needs of a particular legal document or transaction.
By referring to a clause book, lawyers can save time and effort in drafting legal documents from scratch. They can select relevant clauses, modify them as necessary, and incorporate them into their own drafting. It helps ensure consistency, accuracy, and adherence to legal standards in the documents being prepared.
They are particularly helpful for junior lawyers or those less experienced in drafting, as they provide a reliable resource to guide them in creating legally sound and well-drafted documents.
It's important to note that while a clause book can be a useful tool, legal professionals should exercise caution and review the selected clauses in light of the specific legal context and the parties' intentions to ensure they accurately reflect the desired legal effect.
Oh hey, a nice little caution there at the end. Thanks, robot! We’ll be a little more selective about how chatty we let our AI friend get as we share these next few definitions.
Clause book is Nir’s go-to term, and he suggests several others that we may revisit in a future post.
On the SEO front, clause bank gets an average of 50 searches per month and isn’t especially competitive.
Clause Bank
Next, let’s take a look at clause bank.
ChatGPT says…
A clause bank refers to a collection or repository of pre-drafted contractual clauses commonly used in legal documents such as contracts, agreements, and other legal instruments. It serves as a library or database of standardized language that lawyers can draw from when drafting new contracts or revising existing ones.
These clauses may address topics such as payment terms, termination rights, intellectual property, confidentiality, dispute resolution, indemnification, and many others.
The purpose of a clause bank is to provide lawyers with a starting point or a reference when crafting contractual provisions. Rather than starting from scratch each time, lawyers can consult the clause bank to find well-drafted and commonly accepted language that addresses specific issues or requirements.
We won’t duplicate it here, but needless to say our bot friend once again shared some words of warning about the need for a manual review.
Yes, that WAS very helpful, thank you. We are grateful to all the legal professionals who engage with our content and help us with our research. Siân’s perspective is that of a legal ops leader, so we found it very relevant to this discussion.
Interestingly, ChatGPT does indicate a few subtle differences in the definitions for each of these, and yet its hard to argue that they are also beginning to sound alike.
Let’s try one more and see if it has anything original to say.
Clause Set
The last term we’ll take a look at is clause set. This one wasn’t on our radar at first, but some of Martin’s contacts on LinkedIn indicated that it was their preferred term for a list of saved clauses.
Thank you Kris! This goes to show that there wasn’t consensus in our community about the use of these terms.
ChatGPT makes a distinction here though. Instead of referring to the storage of saved clauses to be reused later, ChatGPT insists that clause set refers to a group of clauses within a contract:
ChatGPT says…
A clause set refers to a collection or group of clauses within a legal document or contract. A clause is a distinct provision or section within a document that addresses a specific aspect or issue. These clauses are often organized and grouped together based on their relevance and purpose within the document.
A clause set can be found in various types of legal agreements, such as contracts, leases, or employment agreements. Each clause within the set typically addresses a particular legal obligation, right, restriction, or condition. By organizing related clauses together, the clause set helps to provide a cohesive and comprehensive framework for understanding the rights and obligations of the parties involved.
For example, in a commercial lease agreement, a clause set may include clauses related to the lease term, rent payment, maintenance responsibilities, dispute resolution, and termination conditions. By having these clauses grouped together, it becomes easier for the parties to locate and refer to specific provisions that pertain to their rights and obligations.
Overall, a clause set serves as a convenient way to organize and present the various provisions within a legal document, allowing the parties involved to understand their rights, responsibilities, and the terms of their agreement.
So there you have it — a detailed breakdown of of the differences for the terms lawyers, in-house counsel and other contract negotiators use to define their existing clauses.