What are the best ways to reduce risk when drafting a contract?

Ensure you plan for changes, variations, changes of direction, acts of god, things that will inevitably happen the more lengthy and complex a contract is. While SLAs in principle, and in the past, could be managed with the carrot/stick method, reality today is different. Break down the project and contract into smaller chunks, build in a system for changes, tweaks, small and simple reviews, and go all out on vendor governance. Elevate contracts to becoming a relationship matter, where solutions and purpose are shared, where people feel valued and accountable for finding solutions. Risks can be anticipated and mitigated when there's a will to think and bring about innovation.

In my experience with this industry, we should follow the below: - Understand the local laws with whom you are signing the contract. It will be the best option to hire a local lawyer who knows the law of the land in the best way. It will tighten your compliance part. - Arbitration or mediation clause has to be included per se Dispute mechanism has to be in place. - Remember that the specific details of the contract will depend on your organization's needs and the nature of the vendor relationship. It's important to work closely with legal experts and relevant stakeholders to draft a contract that minimizes risk effectively.

What I don't see discussed here that you want to get a handle on early is what are the most important risks that you want to address. Is it budget? Compliance? Schedule over-runs? Information security? Defining the areas you're most concerned about will help your attorney focus on issues more strategically when it's time to draft, redline, and negotiate.

Be clear with the expectations, project scope, objectives, deliverables, timelines, quality standards. It's equally important to outline roles, responsibilities, and communication protocols to prevent potential conflicts and ensure a successful partnership with the vendor and their contracts.

Avoid the trap of assuming the lawyer is the only person who needs to read the contract. The lawyer is great on legal risk, but the lawyer is responsible for contracts across all business units in your org and cannot possibly keep up with everyone's business goals and objectives. Best practice is to read the contract yourself before handing it to the lawyer and already have comments for them on what you want changed (like, take out the auto-renew and we need something for disputing invoices), and where you have questions (like, do we have any recourse if they keep missing their SLA?).

This is a crucial aspect of any contract drafting. Employing unambiguous and precise language is paramount. Steer clear of vague, subjective terms that might lead to misunderstandings down the line. Ensure consistent and accurate terminology to accurately represent the project's nature. Avoid jargon, acronyms, or abbreviations to prevent potential misinterpretations. Opt for straightforward language that's easily comprehensible by all parties involved. This approach lays a solid foundation for a contract that stands on clear terms and mutual understanding.

Other than DPAs, most contract exhibits and attachments are not "signed by both parties". They are attachments, so they are part of the contract and usually the contract is only signed in one place. Also, the attachments and schedules, etc., should have been attached prior to reviewing all of the terms and conditions (2 steps above), otherwise you're only reading part of the contract.