What do I need to know?
Contracts can be split into to core parts, and if you are not experienced or qualified to draft them (like a lawyer) then understanding the organisation of them is vitally important. When you know how they generally work, you can understand how to change them.
Contracting a story
Our drafting splits the document into sections, and most documents you will come across will do the same. They should tell a story of how the relationship between the parties will work, and it is the detail of this story you need to pay attention to. The practicalities are the most important thing.
We will go through the skeleton of a typical contract for you, and show you the sections and things to look out for.
You will know who you are, we hope (if not we can do a blog on capacity!), but you always want to make sure your details are correct. Particularly the address which, if wrong, could cause all sorts of arguments about whether you received documentation at a later date.
The more important thing is to make sure you know whom you are contracting with.
You can carry out company checks, which are going to be free, if they are a company. Or you should make sure you know the other person enough to make sure they are who they say they are. Much of the time this is done on trust, but we take steps to search for individuals, where they are not represented by their own solicitors.
If you do enter a contract in a name that is not the person’s who signs, or they have the wrong address, the effort needed before you can argue with them over the terms will be massive.
Throughout the contract there will be words used which are defined once, usually at the start. This cuts down on repetition and on the size of (already large… usually) contracts. The words should be capitalised in the contract.
Make sure you understand the definitions as you read through the document, and refer back to the definition table if you do not understand what it means.
Terms between the parties
The main body of the contract will set out the terms between you.
Make sure you understand what you want from the relationship and how you want that put into words. Is there a particular way you want the other party to pay you, or do you want all of the goods you are paying for packaged in boxes before delivery? If the contract is for IP rights, do you want the other party to look after your IP whilst they use it or will you do that, at their expense or not?
Even simple things like the production of an invoice should be thought of, otherwise silly arguments can arise at a later stage.
We make sure we understand what our clients want from a contract, and that helps us shape the terms. Negotiating terms can be easy but it takes experience and detailed understanding to do it properly. Make sure you know the contract inside out and what you want from it, and negotiations will be much easier.
The Term and Termination
NEVER forget about how the contract will come to an end. Sometimes a contract will be for 3 years, so take a look and see whether you can end it before then just by choice.
If you can’t terminate, make sure you really want to sign up to the contract. Three years can be a long time if something happens 3 months after signing!
Check out why you are allowed to terminate and how you do it. When it comes to it, if it comes to it, do you have to send a letter or email or fax? Can you do it orally? Emails are sometimes excluded specifically, so watch out for that.
Tip: When giving notice to cancel, send it in as many ways as possible. The same goes for notices of any importance… Post, email, fax, courier, all on the same day will give you the best argument to say you served it properly.
Obviously this is a very light guide: Making sure a contract is what you want it to be can take time, but we make sure we lead all our clients through that. If you are doing this yourself, just take time to read the documentation and ensure the detail of what you want is set out.
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