What are the best practices for drafting a contract that reflects both parties' interests?

People tend to overlook the process of defining the scope and make it very very general. This is where the battle begins. From the entire contract, I truly believe this is the most important part: what you deliver, how and when you get paid.

- A well defined scope is crucial in avoiding misunderstanding, remember that the parties signing it may not be lawyers. Parties need to have a clear understanding of their rights and obligations with no ambiguity. - If the scope is dependent on other documents such as design plans, refer to this within the scope. - Advise of any regulatory obligations that are outside of the agreed scope, the agreement may remain the same but laws and regulations can change. - Payment terms should include exactly how, when and to who, leave no room for open interpretation that may lead to delays or possibly disputes.

Mirror rights and duties of both parties in a balanced way. Don’t be a “contractual prick” just because you are the multinational giant and they are the local small supplier. “Do unto others as you would have them do unto you.”

Every draft should start with a conversation - in person over a coffee. It's easy to sign a contract when it works for everyone but first you need to understand one another. That aside, everyone needs to understand what they are signing, so try keep the language simple and clear. Complex contracts might reduce risk but they can also reduce outcome.

This is a collaborative process involving several functions within a company. The end-user is seeking certain goods or services but does not necessarily know how the acquisition of such goods/services impacts contractual language and management of the contract. The end-user needs to define the scope of work in sufficient detail so that other relevant functions - legal, procurement, finance, insurance, etc. can identify how this will affect the risk and timing of performance. Sometimes this requires meeting with the end-user to understand what they are seeking and circulating several drafts, especially when the vendor requests deviations to the contract. Contract drafting for a known scope of work needs a “it takes a village” mentality.

Often the indemnification/dispute resolution provisions in contracts are not well drafted. These provisions should be fair to both sides but should be very specific so both parties have a clear road map if an issue arises. With that, the parties should discuss things like: (1) whether they should be required to do a mediation before taking further action; (2) what should be the governing law/enforcement jurisdiction; and (3) whether a winning party should get their attorneys' fees paid by the other side. Also, where the transactions involve more than one agreement, the parties should ensure that the indemnification/dispute resolution provisions are consistent across all the documents (which they typically aren't in my experience).

Most important is FIRST look into who you are entering into a contract with and their track record, experience, competence, legal & financial history etc. Spend more time getting references and researching litigation history on your planned partner. Legal teams focus on trying to protect from risk on every facet but you want to do business with someone who you will never need to litigate against as both parties lose when that happens. Then when you get to the negotiation phase you will tend to focus more on the things that really matter rather.

One very important risk not to overlook is to ensure that the person signing the contract especially on behalf of a company has the required capacity and authorisation to sign on behalf of a party. This is usually by way of a board resolution or any other legal instrument. This is to avoid the risk of the contract being challenged in future. Due diligence is therefore very necessary to avoid such risks.

Once the risk is identified then compensation or penalty should be on both the parties based on the terms agreed. One side penalty will be a disaster.

Every contract should have bonus and LD clause so that timeline is well understood and the team works towards the bonus . Both parties should act judicial and work towards completion jointly . Client and contractor should work together to complete the work in time. Time : cost money to both and that’s should be understood well by both parties. Any problem / opportunity should be addressed by both and look for solutions. Consider contractor : Vendor as part of your assert . Make sure you get the right partner : selection is very important . Not just pricing . Very important .

There is a simple trick that will force you to use plain language in contracts. Just follow the rule: one clause = one sentence. If you want to use two sentences, the second sentence should be another clause or sub-clause. At first it seems too simple to work but quickly you will find that it helps you see through any unnecessary complexity in the text. To start with, it is worth trying this method on a contract you have received from the other party. Break down their multi-sentence provisions into separate clauses. Do this in particular for provisions that are complicated and difficult to understand. You will find that, after this simple operation, you will see any illogicalities and repetitions that make the text difficult to read.

Plain and simple language is important for contracts. It helps both parties understand their rights and obligations. It avoids misunderstanding, misinterpretation, or dispute. It saves time and money by reducing the need for clarification, negotiation, or litigation. It builds trust and goodwill by showing respect and transparency. It prevents disputes and enforces contracts by eliminating loopholes and uncertainties. I agree with plain and simple language in contracts, and I encourage all to use it. It makes contracts clear, fair, and enforceable.

People always believe that contracts should be written in very old and boring legal language, when it is not the case. You can use examples, write exactly as you speak and even use emojis to get the message across. The main idea is to fully cover the collaboration, not to avoid any misshape words.

Keep these ideas in mind to ensure clear writing: - Avoid the passive voice. Don't say "client will be invoiced monthly". Instead say, "agency will invoice client monthly" - Avoid strings of redundant synonyms. Don't say "Seller assigns, transfers, and conveys the asset to Buyer". Instead say "Seller sells the asset to Buyer." - Avoid "chatty" contract language. Don't say "we'll get right back to you." Instead say "Agency will respond within three business days." - Avoid writing numbers in both words and numerals. Avoid "thirty (30) days". Instead say "30 days". Use these tips to keep your contract clear and no more complicated than the underlying transaction.

Simplify. Simplify. Simplify. Contract language was born of the legal system’s complex verbiage. Something I learned in my journalism studies that has added tremendous value to my legal writing is: Clear, concise wording trumps excessive technical writing. Said differently: More and bigger words do not = better writing. Most legal documents contain multiple terms and paragraphs describing the identical concept. This is so unnecessary. Write like a journalist. It will make you a better lawyer.

People may forget what they meant, but the writing remains, and for this reason we must double-check everything we wrote. After signing, no mistake is recognized

This is the most simple part of the process, yet skipped by so many. When the questions start and you cant find your copy of the executed agreement/contract, you appear to be an amateur...

Always after signing, after giving a copy to the parties and keeping one myself, I also scan one for my electronic file, with the cloud I can have access to my files from anywhere, whenever and if the client asks me to

A contract is just a handshake between two parties that want to make it official. It should be seen like an open discussion, where you clearly define and implement all the terms you need and want. Think of it as a marriage: you want to have a smooth relationship, honest talk, healthy boundaries and each and every one knows what they have to do and how you can solve the conflicts between you two. This is exactly how you should look at a contract :)

The biggest issue I see again and again with contracts is the failure to consolidate and review the entire contract when making ad hoc amendments . I've seen so many "Frankenstein" contracts that are practically unreadable. Tell-tale signs of a Frankenstein contract: - you see that different clauses or sections have clearly been written by different people; - words are missing when tracking changes have been accepted and the sentence is meaningless; - sections, paragraphs or appendices go missing or no longer exist It's worth the effort every time you amend a Contract to review the WHOLE contract and to try and bring it back to the original form it SHOULD be in. Remember, amending in one place will most likely impact another section.

If the contract is material to you PLEASE do not attempt use something off the internet without consulting with an attorney. Much of what is freely available on the internet is not well drafted (in my experience). Moreover, often when people try to draft an agreement themselves from something they found on the internet they amend/remove/fail to remove provisions they shouldn't because they are not clear on what all of the language means. Even if you want to start an agreement on your own for cost concerns you should consult with an attorney to review it and make sure it does what you want it to do.

Understanding the project behind the contract is an extremely important first step. The sales and project management team often do not involve legal or the contract management team until negotiations begin. Having the contract manager in the process from the beginning makes drafting the agreement easier. It allows the contract to be created by the parties rather than being a red-line battle in a teams meeting with a boilerplate document. When the parties draft the contract together the legal issues such as warranty, indemnification and confidentiality can be resolved leaving more time for scope of work discussions. This eliminates all of the tug of war and streamlines the contracting process.

Ensure at start that the parties have the mandate to make decisions in accordance with the budget and the companies' delegation order.