6 Contract Drafting Tips

Drafting contracts is not exactly the most exhilarating activity. Every word, comma, period, sentence, and paragraph of the document that eventually becomes a contract are critical to its existence and interpretation. As a result, getting a contract to an agreeable form necessitates painstaking precision. It is frequently said that negotiation is an art, and when it comes to contract management, both the negotiation and drafting of the agreement require a unique set of skills and knowledge. Here are 6 tips to drafting a strong contract:

1. Do Not Reinvent the Wheel

First and foremost, the whole contracting world has been around long enough that there is no reason anyone should have to begin a contract from scratch. In most states, there are some pretty standard clauses that must be included and these can easily help lay the foundation for the contract’s direction. Plenty of law firms and in house counsel for companies rely on templates to get the ball rolling, and this should almost always be the case when getting started.

2. Start With an Outline

Obviously, templates are not going to address any unique facets of a contractual agreement, so some level of thought and creativity will be required for the drafting process. With respect to the nuanced aspects of the deal, it is a good idea to create an outline highlighting the key terms and conditions that must be included. Most types of writing begin with some kind of outline, and drafting a contract really does not need to be any different.

3. Stick to the 3 “Cs”

When thinking about how to draft a contract, the key is to stick to the three “Cs,” which means be clear, concise, and consistent. Clarity is crucial to avoiding arguments over interpretation and getting right to the point prevents the likelihood of important points being lost in verbosity. In addition, it is absolutely vital for the drafters to ensure that information stated in one place that is reiterated elsewhere is always consistent. When key information, such as an important deadline or price, does not match in different sections, this can be a recipe for a disastrous court battle.

4. Do Not Shy Away From Definitions

People tend to dislike contracts because of the legalese contained within them. Vague and borderline useless words like reasonable and of the essence are often used liberally. Unfortunately, there are certain words that take on legal significance, and while these may be necessary in some instances, they are not in others. If and when a special or unusual word is used, it must be clearly defined. It is often worthwhile to include a glossary with definitions to make it abundantly clear what a word means and this helps with ensuring there is consistency in the words’ usage.

5. Pay Attention to Grammar AND Punctuation

People may not realize the importance of a comma until they learn that this single, seemingly insignificant piece of punctuation can end up costing a company millions of dollars. The tense of verbs, pronouns, conjunctions, and punctuation must be used carefully and correctly. These are often minor details that the initial drafters begin to inadvertently overlook because they have gone through the document so many times. Thus, having someone less familiar with the document take on the role of proofreader is often advantageous.

6. Include Conflict Resolution Procedures

The goal of drafting a contract is to avoid a future dispute and yet contract disputes are always clogging up court dockets. Given that conflict resolution is often unavoidable, it is important to ensure that the conflict resolution procedures are clearly spelled out. This can include the type of resolution such as mandating mediation or arbitration, as well as a selection of the state laws that will apply. This is often standard language easily extracted from other types of contracts so long as it makes it clear what, when, and how the resolution process will go down, if necessary.

See how you can draft contracts of any length and complexity in under 10 minutes with ContractWorks CLM software.

Disclaimer: SecureDocs, Inc. and its affiliates do not provide legal advice. This blog was written for informational purposes only. Therefore, it is not intended to provide legal advice, and it should not be construed as such. Please be sure to consult an appropriate professional for advice pertaining to any legal matters.