Many contract disputes can be avoided if you invest time and money in the negotiation and drafting of the agreement. The more pre-planning you put into a transaction, the more likely you will avoid litigation over its terms.
One of the most important things you can do in documenting the deal is to make sure the written contract accurately reflects the negotiated transaction. While this may seem like simple advice, you would be surprised at how many parties get into a rush and miss inaccuracies. In fact, it commonly occurs when one party provides a form contract without revising it to include the finer points of the deal. While form contracts can be helpful, they can also get you into trouble if you don’t modify the document to accurately reflect the specific deal points.
One of the most highly disputed clauses in a contract deals with performance issues. It is imperative to be clear about deadlines and avoid using vague time periods. Setting forth clear and concise deadlines protects both parties. It not only prevents confusion, but it also ensures you will receive what is expected in a timely manner. It can also provide you the ability to cancel the contract without penalty if the deadlines are not met.
Additionally, a contract should detail the level of quality that is expected and how it will be decided whether the standard has been met or not. Whether it is services or product that is being provided, each party should be clear on what is expected and who will bear the burden of fixing any problems (and within what time frame).
Finally, when you are drafting a contract, it is wise to include an “escape clause.” This clause provides that if a party can no longer perform under the agreement, there is a method for mitigating the damages while also avoiding litigation. In other words, if a party must back out of the contract, it can pay a certain sum of money to the other party in satisfaction of its obligations under the agreement.
To learn more about negotiating and drafting contracts that will protect your company’s best interests, contact the legal team at The Swenson Law Firm. With our years of complex business trial and litigation experience, we are an effective, efficient and affordable choice in representing you at the bargaining table and in the courtroom.