Some simple contract drafting practices can minimize misunderstandings and the chances of costly future litigation. Here are some essential tips:
Always remember to:
- Start with a standard structured contract for reference and customize it to your particular circumstances.
- Ensure that the parties to the contract are correctly identified in the opening section with an accurate description of their names and addresses.
- The date should be included in the first paragraph so that it can be easily referenced later.
- Apply logical headings to each clause for easier identification of particular provisions.
- Always number each section for ease of reference.
- Remember to use simple words and straightforward language in the contract in order to avoid ambiguity and confusion.
- Only use “shall” when the intention is to create a mandatory duty or an obligation.
- Ensure that all of the technical terms are defined in the initial sections of the contract.
- Be careful in the use of punctuation marks, as a single mislaid comma can change the entire meaning of a sentence.
- Use conjunctions cautiously, as they can have a drastic effect on the words’ meaning.
- Ensure that the contract has tackled all contingencies, and nothing else is left uncovered.
- Have all parties initial all pages of the contract.
- Avoid incorporating pointless material into the contract that is irrelevant to the acts to be undertaken.
- Don’t add excessively lengthy sentences. Instead, split them into simple and straightforward sentences.
- Never be repetitive, except when it is absolutely necessary.
- Avoid using the phrase “representations and warranties”, except when both of the ideas are referred to in the clause, not just one.
- Don’t presume that the other party to the contract would describe the terms in the same manner you would. Always include a definition in the agreement when appropriate to avoid any doubts.
- Never use ambiguous words or sentences in the contractual agreement.
- Refrain from verbal clarifications of ambiguous terms. Always incorporate the whole thing in written form.
- Don’t rush to initiate actions according to the contract terms until and unless both the parties have signed and executed it.
- Never agree to an amendment of a contractual agreement without putting it in written format.
Remember to avoid the following:
- Avoid incorporating pointless material into the contract that is irrelevant to the acts to be undertaken.
- Don’t add excessively lengthy sentences. Instead, split them into simple and straightforward sentences.
- Never be repetitive, except when it is absolutely necessary.
- Avoid using the phrase “representations and warranties”, except when both of the ideas are referred to in the clause, not just one.
- Don’t presume that the other party to the contract would describe the terms, in the same manner, you would. Always include a definition in the agreement when appropriate to avoid any doubts.
- Never use ambiguous words or sentences in the contractual agreement.
- Refrain from verbal clarifications of ambiguous terms. Always incorporate the whole thing in written form.
- Don’t rush to initiate actions according to the contract terms until and unless both the parties have signed and executed it.
- Never agree to an amendment of a contractual agreement without putting it in written format.
Conclusion:
No matter however effectively and efficiently a party analyzes and understands the clauses, it is advisable to consult with a lawyer for the final review of the contract. Remember to notarize the contract if it is required by law, and always keep the copies of the contract in a secure location.
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