Working with contract lawyers is essential when entering into a legally binding commercial agreement. It’s important that you draft the document correctly and completely, so your interests are fully protected and there are no ambiguities or loopholes. To help you, here are some common mistakes to avoid when drafting a commercial contract with your lawyer.
1. Not Hiring an Experienced Contract Lawyer
Using the services of an experienced contract lawyer is vital in ensuring that all legal requirements are met when creating a commercial agreement. An experienced lawyer can give advice on the best way to structure the agreement, assist in identifying any potential risks, and ensure that all parties involved understand their responsibilities under the contract. A knowledgeable lawyer also has experience negotiating contracts and can provide insight into any legal issues that may arise during the process.
2. Neglecting to Put Everything in Writing
When entering into a commercial agreement, it is very important to get everything down in writing – even if it seems obvious or unimportant at the time. This includes setting out payment terms, specifying how disputes will be resolved, detailing who owns intellectual property rights (if relevant) and spelling out confidentiality agreements for each party involved. If anything is left out of the written contract, it may not be enforceable later.
3. Failure to identify who is responsible for what
It is important to clearly identify who will be responsible for different aspects of the project from the outset, otherwise there could be confusion later on, which could lead to costly delays or other problems caused by a lack of clarity about roles and responsibilities between those involved. Make sure you specify exactly what each party is required to do as part of their role within the agreement – be careful not to put too many obligations on any one person/organisation, as this could cause problems later on when they struggle to meet expectations that have been set too high at the outset!
4 . Failure to include an exit plan
No one wants to think about failure, but it’s always wise to plan for the worst by including an exit plan or termination clause in your commercial contracts – just in case things don’t go to plan! This will outline what action should be taken should either party breach their obligations or need/want to get out of a deal before the completion date; covering issues such as notice periods required to terminate agreements & financial compensation to be paid if applicable etc… It’s better to be safe than sorry!
5 . Not considering all the costs involved
The costs associated with any commercial venture can vary greatly depending on factors such as size & scope etc… so make sure you consider all the costs involved upfront – both direct & indirect – so there are no unexpected surprises along the way! Ensure that each cost element has been thoroughly discussed by both parties prior to signing any paperwork & agree realistic timescales for payments etc…as this will ensure that everyone knows where they stand financially at each stage of progress towards completing the tasks outlined within an agreed contractual framework.
6 . Not being clear about governance rules
All parties need to agree on governance rules before signing any contracts, as these rules will dictate how decisions will be made in the future and ultimately how different parties will interact with each other as they work together to achieve the objectives set out in the clauses prior to the start of the associated work (i.e. – information sharing protocols / dispute resolution procedures / decision making processes). Establishing clear guidelines helps to define expectations up front – minimising misunderstandings down the line!
7 . Ignoring contingencies that may occur during contract performance
It’s wise to think ahead about foreseeable events that could occur during the implementation phase – especially those that could affect performance outcomes or negatively impact timelines previously agreed upon between two/more organizations operating under the same contractual conditions…such as natural disasters/changes in government legislation affecting available resources / technological advancements happening around the same time period, etc. As these elements can occur unexpectedly, having contingency plans already in place negates the risk associated with them and significantly reduces the chances of errors arising due to their consequences!
8 . Skip over legal jargon too quickly
The legal language used when drafting contracts can often sound confusing & difficult to understand… however, it serves the purpose of protecting multiple stakeholders by providing complete transparency regarding the clauses laid out beforehand, so it’s essential to take time to read through the documents carefully, highlight areas that need clarification, reach points of consensus between the entities agreeing to abide by predetermined terms and conditions within a given timeframe specified therein… Don’t let yourself be overwhelmed though – asking questions, expertise, knowledge, and assistance provided accordingly means no detail is overlooked, formulating a communication strategy designed to negate the chances of miscommunication arising after execution of the document concerned, thereby protecting the future interests of all involved!
Working with an experienced contract lawyer is essential when drafting a legally binding commercial agreement. It’s important not only to employ someone who is knowledgeable but also to ensure that everything is put in writing and that every detail is considered so that your interests are fully protected should anything go wrong along the way. By avoiding these common mistakes, you can ensure that your business transaction runs smoothly, now and in the years to come!