Six Tips for Drafting Crystal Clear Contracts
When you're setting up a contract, you want to make sure that all parties understand their roles and responsibilities. This is where drafting comes in, which some people refer to as "arranging your divorce before you get married."
You want to ensure that your contract is so crystal clear that no one would even think of taking it to court because they know they would lose.
Here are six tips to help you make sure your contract stays out of court.
First, prepare a clear outline together with your client. This outline will help you identify the core deal terms and any issues or loopholes that need to be addressed. Additionally, asking your client if they have a similar contract from the past or looking for precedents in your own database can save you time.
Second, write with the 3 C's in mind: clear, concise, and consistent. To be clear, avoid ambiguous terms and use simple language that a layman can understand. Repeat yourself only if it improves clarity, and be careful with your use of conjunctions, modifiers, and punctuation. To be concise, cut out unnecessary words or phrases. To be consistent, use the same terminology throughout the contract.
Third, remember the recitals. These "whereas" clauses provide context and can be a good place to provide background information for the collaboration. Include a reference to the recitals in the first paragraph of the body of the contract and state that they are true and correct.
Fourth, define terms and parties as you go. Keep track of important terms and parties as you write the contract and explain technical terms and concepts. Double-check definitions in the end to avoid confusion.
Fifth, measure twice, cut once. Check paragraph numbering and cross-references, and do a thorough spelling check with your spelling checker and manually. Always have a second pair of eyes look over your contract for errors, inconsistencies, and unclear areas.
Lastly, use the latest legal drafting software which include 'Smart Drafting' and 'Scenario Thinking' technologies. These technologies help lawyers in drafting faster and better contracts by retrieving your previously written clauses. It can be a useful tool for streamlining the drafting process and also not missing any what-if situations.
By following these six tips, you can ensure that your contracts are clear, concise, and consistent, and that all parties understand their roles and responsibilities. With a solid contract in place, you can avoid any misunderstandings or disagreements that could lead to a court battle.