The Importance Of Contract Review
We enter into contracts every day for business and personal reasons. Some of these contracts are written, while others are oral. In every case, it is important that the terms of the contract are fairly negotiated, properly drafted, and reviewed to ensure the contract meets the intentions of the parties involved.
Negotiating a contract is of critical importance. By negotiating contract terms, the parties to the contract bargain for their own best interests. While negotiating contracts, it is important to remember the following:
- Parties should be comfortable with their duties and obligations;
- The intentions, requirements, and expectations each party has of the other party need to be clear at the beginning of negotiations;
- Negotiating for a remedy within the contract in the event there is a breach by either party may save time and expense down the road.
“Form contracts” and contracts with the language and terms already set. A common example of when form contracts are those used is in landlord-tenant agreements. When using form contracts, parties usually do not negotiate. This makes it essential to carefully review the terms of the contract in order to be aware of the rights and responsibilities imposed by the agreement. This is because a “form” can make one feel comfortable that it is safe and secure since previous people have already signed it. This is not always the case. Every deal and transaction is different and unique. Especially if your particular deal has a particularly unique set of circumstances or a large amount of money involved, a form generally just isn’t sufficient.
Many parties may want to tailor a form contract to their needs and will use the form contract as a model. When drafting the contract, it is important that each party knows exactly what is expected of them. If there are any words that could be misconstrued, or any terms that are ambiguous, parties should be sure to define them within the contract. Ultimately, when drafting a contract, clarifying the terms and duties should be the goal.
Many parties use legal words and language, known as “legalese,” when drafting contracts. However, this may, make the obligations and terms of the contract confusing. Using understandable language will ensure that both parties understand what the contract says and means, and therefore understand what they are agreeing to. While sometimes you have to use terms of art, having a “meeting of the minds” is of paramount importance in drafting a contract.
It may sound obvious, but before signing a contract, each party should read it. In reviewing the contract, parties need to make certain they understand the stated obligations are under the contract. If there is any uncertainty as to the duties of each party, and yet they signed the contract, they may be liable for breaching the contract. Having a legal professional review the contract terms will ensure that the needs of each party will be met and that no party will obligate themselves unexpectedly.
Contract negotiations, especially in the context of important financial contracts, can be complicated and difficult. An attorney can assist you with negotiations so your needs and requirements will be met. Additionally, a lawyer can help you with the initial and final draft and contract review, and explain to you your duties under the contract. Hiring an attorney will help you secure your best interests throughout the entire contract process.
If a deal needs to be drafted, revised, or reviewed, LOKK does it, and LOKK does it well.