Negotiating and drafting contracts can be a long, drawn out process, especially when the drafting round has to begin from scratch. When it comes time to put pen to paper, a lot of hours and manpower can be saved if there is a general agreement from which the drafters can start. Ideally, there should be several templates from which to choose and the shelf-life of these agreements should be fairly substantial to avoid having to reinvent the wheel every couple of years. Here are some things to consider in order to draft usable long-term contracts:
Start with a template
Obviously, creating a contract that can be used over the long-term has to start somewhere. However, there is a good chance that a helpful template already exists. This may be an internal template that can be adapted to different transactions, or it may be something that counsel can furnish. Even if significant portions of an existing template have to be modified, it is often easier to edit a document than start from the very beginning. There are likely generic forms of many different types of contracts available online as well.
Although any of these documents should be used with extreme caution, there are reputable websites staffed by attorneys who have vetted the documents they provide. Of course, it is always wise to have company counsel review any selected agreement. The general goal should be to create a folder of applicable templates that can be quickly referenced when certain kinds of contracts are needed.
Create alternative scenarios
Once a template folder has been established, it is also a good idea to consider how potential deals may unfold and the way in which the existing templates will need to be changed. These alternative scenarios can be bracketed and embedded within the contract. This will provide the drafters with viewable options within the document that they can quickly select and then delete the sections that are not applicable to the particular deal.
On the other hand, there can be separate documents that contain terms for unique deals that can be copied and pasted as appropriate. Either way, there should be some thought as to the types of contracts the company foresees entering and the terms on which they would like to strike those bargains. With this information in mind, the drafters can create several possible scenarios with blanks for specific numbers and percentages. If this is not done in advance with a bit of discussion and analysis, then companies may end up agreeing to just about anything for the sake of saving time and money.
Fortunately, when it comes to contract management, there is no need to scrap an entire agreement, as minor modifications are easily achieved via the use of addenda or amendments to the original document. Savvy contract drafters can use an amendment to make changes to entire sections of a contract, although a keen attention to detail is crucial to ensuring that any updates are in accord with the entire agreement and that the changes made do not conflict with other provisions of the agreement. Ultimately, a company’s strategic plan must incorporate many facets of the business’s operations, including contracting, and steps must be taken to ensure that precious time is not wasted on creating new documentation every time something is needed. One of the proven tactics to achieve this is using contract lifecycle management software.
The Buyer's Guide to Contract Management Software
Quickly identify solutions to your specific contract management challenges.