There are lots of different jobs that can bring you into contact with contracts. Whether you’re a contract lawyer for a law firm or a company’s legal team, working in sales or running your own small company, you’re going to be dealing with contracts a lot.
It helps to know some of the background thought that goes into drafting contract, so you can avoid common errorsand tricky wording that could put you off balance with your partner.
Clarity, or the Lack There of
Many lawyers and business people feel compelled to use archaic structures in their contracts. This makes the contract fit into a tradition of legal language going back hundreds of years, but it can also be used to obfuscate important issues behind complicated wording.
If the party you’re trying to sign a contract with feels this compulsion to use over complicated ‘legalese’, especially for a contract covering something as simple as supplying a product ask yourself why. It could be worth asking to simplify the contract down to essentials.
If you find yourself stuck with a contract you yourself can’t clearly understand, run it past a lawyer to make sure antiquated verbiage isn’t concealing a nasty surprise. If you’ve signed a contract and find it includes something you didn’t cover in your negotiations, it’s going to be very difficult and possibly costly to avoid the consequences, especially if you did all your negotiating in face to face discussions, with no paper trail you can refer to.
When you’ve stripped the wording of your contract down to the bare essentials, make sure you’re choosing the right words.
What we’d consider homophones in every day speech can turn out to be almost contradictory when analysed by a judge in a dispute over a contract. For example, the law regards your ‘best efforts’ as very different to ‘reasonable efforts’.
Your ‘best efforts’ require far more than simply ‘reasonable efforts’. Making a reasonable effort allows you to take into account the capacity of your business, and the knock-on effect for other endeavors. Your best efforts require you to leave no stone unturned, and prioritise the contracted service above all else. If the other party suspects you haven’t, you may be liable to pay a penalty.
It’s always worth getting expert help, even if it’s just to review a contract before you sign it. Failing to see a lawyer first, is the very definition of a false economy.