When a contract dispute arises, there may be differing interpretations of the contract terms. A court asked to construe the disputed terms will look to statutory principles. But don’t wait for a dispute to learn these principles—be aware of them when drafting an agreement to ensure that they won’t counteract your client’s intent.
The key to keeping contracts out of the courtroom is drafting them well and making sure that they accurately capture the parties’ intent. In Part 1 of this post, we discussed five common contract drafting mistakes and how to avoid them. Here are five more.
When drafting a contract, make sure to give attention to the defined terms portion. Defined terms are important because they allow the use of short-form references for names, terms, and concepts that are frequently repeated in an agreement, thus saving space, improving readability, and assuring consistency. They also encourage the drafter to be precise in stating important concepts and procedures. Use these four tips next time you draft a contract.
Yes, drafting a contract takes a lot of work. But it generally takes less time to draft a contract document that advances your client’s interests than it does to modify another party’s document to achieve that result. So whenever you have the opportunity to be the drafter, take it—and follow these four steps to drafting a contract to your client’s benefit.