Diagramming Transactions: Some Modest Proposals and a Few Suggested Rules

Everyone talks about the weather, but no one DOES anything about it. The practice of using diagrams, in legal practice and in the legal Academy, is the reverse: everyone does it, but no one talks about it. This article reviews the scant literature on diagramming transactions, the current legal practice regarding diagrams, and makes some modest initial suggestions, for the most part consistent with extant practice, for rules on diagramming transactions. The author begins with creating a "title" or heading for the transaction diagram, discusses and prescribes the use of shapes to designate the type of entity party to a transaction, the inclusion of certain other information regarding each party, certain formatting conventions (horizontal v. vertical; left to right; top to bottom), the use of a Key or Legend for supplemental but important information, and finally, the use of arrows to designate actions (while lines signify ownership).

The author acknowledges that this is an initial step and invites comments and specialty-oriented elaboration from practitioners and members of the Academy.