All significant commercial transactions, whether it is for the provision of services or sale or acquisition of an asset, will require the deal to be reduced to paper.
The commercial parties may agree to do the deal ‘subject to contract’; it is at this stage that a client will need to be professionally advised. There are considerations that those involved in business may not take into account at such times so rushing a deal or paying insufficient attention to detail could have dire consequences.
Some clauses in what appear to be long-winded agreements may be given only a cursory glance, yet if something goes pear-shaped months or years after the conclusion of the contract these clauses could come back and bite if not given due attention.
Most commercial contracts are standard or have become a template from numerous past transactions of the solicitor. So to customise it to suit your particular needs each clause needs to be considered by you and your solicitor to determine whether it stays in or comes out. Insufficient attention to detail or rushing the solicitors to close negotiations could result in a clause or clauses unfavourable to you remaining in the contract.
One of the pitfalls of not paying sufficient attention to the inclusion or exclusion of clauses or understanding them is where two clauses conflict, thus giving an ambiguity to their meaning or interpretation. This could result in a disadvantage to you in the future as once the contracts are signed, that’s it.
Tedious as wading through contract clauses line by line is, it is advisable that you do this. If there is any language you do not understand ask your solicitor and be sure you are clear on its meaning. Unfortunately, most of these standard contracts are written in uncommonly used English and with legal jargon. There has been much discussion on removing the legal jargon from such contracts but they are still there and that means we have to deal with them.
Here a solicitor’s previous experience in such contracts is vitally important. It’s no use to you if you ask your solicitor the meaning of a sentence or clause and there is a delay in their response or you get an ‘I think …’. A delay in their response could mean they themselves are figuring out what it could mean. That is not good enough. For commercial contracts be sure your solicitor has experience in this area.
These negotiations are often dealt with solicitor to solicitor and by post or email exchange. This means the original agreement goes through several versions and it can become very tiresome seeing the same contract with marginal changes from version to version. But it has to be done and here clear instructions to your solicitor will pay its way in spades.
Clients’ ‘Do’ List
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