When to enumerate. If a contract provision contains two or three lengthy phrases or more than three list items, it is recommended to break the paragraph and create subparagraphs. A ‘lengthy phrase’ would probably span over more than two or three lines whereas ‘listed items’ should be more than a few words. (In other words, do not create an enumeration if an inline listing would clearly suffice.) The dividing line is a matter of taste, driven by the criteria of readability and avoidance of ambiguity.

Sub-enumeration. When enumerations result in page-crossing lists of items, it may well be advisable to sub-enumerate the list. A typical example of such list can be found in share purchase agreements (where between the effective date and completion of the transaction, a number of actions would not be permitted without the prior approval of the purchaser), or in joint venture agreements (listing the items that are subject to approval by the joint venture partners or a supervisory body). Business people who are supposed to work with such list feel uncomfortable as to whether all relevant matters are indeed listed or whether a desired action is subject to approval. Instead of one list of 25 to 30 items, it may be recommendable to subdivide the list into several topical ‘sub-lists’ (e.g. operational matters, IP-related resolutions, financial and tax matters, corporate structure-related decisions, employment and pension related matters and miscellaneous topics).

Many lawyers would produce an illegibly lengthy list of matters that are subject to approval, failing to introduce a logic in its order, and ending up in sometimes over 26 enumerated items. The reader of the contract is then stuck in interpreting whether or not something must be deemed to be covered by the enumeration.

Because of the limitations of indenting html texts, I insert the following example as picture:

A salient detail in the above example (which is usually inserted in M&A transaction agreements where signing and closing are split) is that the model clauses used by a lawyer from a law firm will start the list with matters that would frustrate the purpose of a transaction fundamentally (and would inevitably constitute abusive behaviour by the seller); whilst the in-house legal counsel and business managers will probably not even consider taking those first listed actions. The latter group of persons actually use the laundry list in order to review if entering into a business contract or if maintenance investments in assets (capex) requires purchaser’s approval.

Numbering inline enumerations. If a running text contains an enumeration that you want to number, use the numbering style of the level that would apply if you had divided the enumeration into separate paragraphs. For example, if subsections are numbered (a), (b), (c), an enumeration within the body of a section should adopt the subsection numbering style. Obviously, if the same section already contains subsections, the numbering within the body text should be different.

Semi-colons, commas or full stops. Enumerated paragraphs should be separated by semicolons. The last enumerated paragraph should end with a full stop, except if it ‘continues’ in a non-numbered closing paragraph (see below). A different approach is acceptable if there is no non-numbering closing paragraph (see below), provided that such approach is adopted consistently (i.e. all enumerated paragraphs should end with the full stop). For example, recitals may well be ended by a full stop (even though they are all deemed to be led in by the heading whereas:); definitions are increasingly often ended by a full stop; if you use a document assembly software application, enumerated clauses may be inserted or cut out, triggering a preference to end each clause with a full stop. Otherwise, enumerations, which are not divided into paragraphs, should be separated by commas.

The lead-in. It is a best practice rule to move as much text as possible from the enumerated paragraph into the lead-in of all enumerated paragraphs. This is also in order to prevent enumerated paragraphs starting with such emphasis on the continuation of the lead-in clause that it becomes irritating or formalistically repetitive. For example, if all the enumerations start with a verb in the infinitive, the word to is probably best placed in the lead-in phrase. For example, recitals should read as a story and provide basic background facts: the second and subsequent recitals should not start with whereas. It is better to place whereas above all the recitals.

Capitals, lower case and sentence breaks. If the enumerated paragraphs are ended by a semi-colon, the subsequent paragraphs should (as a rule of best practice) start with an underscore. The idea is that the entire clause consisting of the lead-in and all enumerated paragraphs are one continuous sentence. If you end each enumerated paragraph with a full stop, each enumerated paragraph should start with a capital (including the first enumerated paragraph, even though one could argue that it is the continuation of the lead-in phrase). If the enumerated paragraph consists of more than one sentence, it is nevertheless commonplace to end the final sentence of that enumerated paragraph with a semi-colon.

Grammatical structure. If applicable, the verb tense or the structure by which an enumerated paragraph starts should be repeated consistently. For example, if you choose to start the enumerated paragraph by using the infinitive (to make) all subsequent enumerated paragraphs should use the infinitive and not shift to the present progressive tense (is making) or present perfect (has made). For another example, do not shift the lead-in words in the event that X applies,… of one enumerated paragraph to words importing exactly the same in other paragraphs of the same enumeration (e.g. do not change halfway to in case X does not apply,… or, worse, if X is not applicable,…).

Use of and and or. The final enumerated paragraph should be preceded by or or and (in inline enumerations placed before the numbering). In case of or a drafter may sometimes seek certainty by adding or to each of the enumerated paragraphs; this is not necessary, unless the enumerated paragraphs apply by exclusion of the other paragraphs (i.e. the lead-in should clarify this by using the word either). In case of and there is no need to add and to each paragraph. If the enumerated paragraphs in any running sentence are relatively complex or lengthy to warrant their being preceded by a colon, then they should also be separated by semi-colons rather than commas.

Non-numbering closing paragraphs. Occasionally, the enumerated paragraphs continue into a wrap-up sentence that applies to each enumerated paragraph (whichever paragraph may apply in any given context). Such wrap-up paragraph should be given the indentation of the lead-in clause to the enumerated paragraphs (but without a number). The continuation from the preceding enumerated clauses is indicated by using a comma at the end of the last enumerated paragraph (instead of a full stop). For example (at the end of subsection (b)):