It should go without saying that you need to be extremely diligent when drafting a contract as it is your main opportunity to protect your position and create terms that you are happy to adhere to.
A draft will act as the template for the final contract that will be drawn up and signed. If you talk to a commercial litigation law firm in Sydney, for instance, they will likely confirm that it is always best to get guidance on what you need to cover in the document, and how to say it.
There are some definite dos and don’ts to know about when creating a draft contract.
Here are some key points to keep in mind.
Make sure you cover all of your aims and objectives
One of the most important things you must do when drafting a contract is to create a checklist of all the key points and topics that you want and need to cover in the document.
Think carefully about what the fundamental purpose of the contract is.
Even when you are sure that you have covered all of the major points that need discussing and have a good understanding of what you want to achieve from the contract that you are creating, it is still highly desirable that you get professional guidance and a second opinion from someone who knows how to word the terms in the right way.
Be open to making multiple changes
A draft contract is rather like negotiating terms. It is not usually a document that you get right on the first attempt.
That is why it is important to be open to the idea of having to draw up multiple draft versions of a contract until you are completely satisfied that everything is just how you want it.
It is also good to be willing to add new information if it is deemed necessary.
Don’t be tempted to leave anything out
You might be tempted to leave certain details or terms out of the contract to make it easier.
Your reason for doing this might be based on an understanding that you have with the other party. However, any omissions are not advisable if they cover points that need to be protected.
A classic faux pas to commit when drafting a contract would be to be vague about dates or timelines that are actually highly relevant and important.
A lot of the time, this ambiguity is largely based on a number of assumptions or a desire to avoid a certain amount of formality when it is a friendlier contract scenario.
Whatever the circumstances and the relationship you have with the other party, your draft contract should avoid any gray areas that could easily be misinterpreted.
Every detail matters, however trivial it might seem. In simple terms, if you don’t put something in the contract it cannot be part of the contract. That is a situation you want to avoid as it loosens your level of control.
The smart thing to do when drawing up a draft contract is to speak to a lawyer with the right commercial knowledge to be able to help you create a document that protects your interests in the best possible way.