6 Key Clauses Found in Commercial Contracts

Contracts are used in virtually every industry, and many of the contract clauses that are used are applicable across sectors. In fact, there are certain contract clauses that are likely to make an appearance in just about any contract that is drafted. Commercial contracts, in particular, tend to contain a standard set of terms and conditions. Here are six key clauses found in commercial contracts:

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How to Write a Strong Statement of Work

A contract creates a legally enforceable agreement between two or more parties. For a contract to exist, there must be an offer from one party, acceptance of that offer from the other party, and valid consideration for the exchange, usually the payment of money in return for the provision of a good or service. Although contracts are drafted to clarify the parties’ duties and obligations under the written, legally binding agreement, they do not always spell out the manner in which those responsibilities will be undertaken.

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4 Tips for Mastering Subcontracts

For most companies engaged in contracting, entering into subcontracts is a routine necessity to ensure that a project is completed in an efficient and timely manner. Even larger companies with a healthy amount of resources at their disposal often find it advantageous to subcontract with another entity that specializes in the provision of a certain good or service. Of course, entering into an agreement with subcontractors can be risky, as their shortcomings or delays can cause a ripple effect across the entire project. Here are some tips for mastering subcontracts:

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Why and How to Include a “Change of Control” Clause in Business Contracts

Contracts are inherently risky, and a number of things can go wrong that may result in a costly contract dispute. Of course, there may be a change in circumstances that is not even addressed in a contract, and thus contesting any such unwanted change is not even a possibility, or perhaps there is only a remote chance of success in the courtroom. One rather significant change that is quite likely to occur and yet not often addressed in contracts is a change in the structure or ownership of one of the parties to the contract. Companies are bought, sold, and merged all of the time, but contracts are often silent as to the impact that such a change should or will have on the existing contract. This is obviously a mistake as a change in ownership may cause changes, both intentional or inadvertent, to the established arrangement. For example, a newly formed entity may change vendors or subcontract with new parties, situations in which the nature, quality, or timing of contractual obligations is altered.

But, this potential scenario is easily avoided by simply including a provision in a contract that explicitly details how the contract must be treated in the event of a change in control. For example, a company may wish to render the contract void if the other party to the deal undergoes a change in ownership. This may be an extreme choice, but there has to be predetermined options clearly written into the agreement. Here is how to include a change of control clause in business contracts:

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5 Tips for Drafting International Contracts

Contract negotiations and drafting can be pretty difficult in the domestic realm, so engaging in these activities on an international scale can add some additional complexities. Although there are some international business standards and norms, there are not really binding laws or governing bodies to enforce the rules. Parties may agree to submit to international arbitration, but ultimate recourse will really depend on the language of the contract. Thus, here are five tips for drafting international contracts.

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Four Tips for Writing Contract Amendments

Drafting a sound contract often requires seemingly endless negotiations and countless versions of the agreement before all parties are satisfied. But, despite spending days, weeks, or even months getting a contract into a mutually acceptable format, circumstances often arise necessitating some sort of amendment to the existing contract language. It is important to remember that an amendment changes something in the contract, as opposed to an addenda which would involve making additions to the contract.

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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 contracting, 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:

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5 Contract Drafting Nightmares And How to Avoid Them

Every phase of the contracting cycle presents its own set of challenges. Contract drafting can be particularly brutal with lawyers for each side going round and round over virtually every detail. Unfortunately, sometimes even those lengthy and detailed drafting sessions result in a mediocre contract. There are certain prevalent problems that crop up time and again irrespective of the contract's core content. Here are 5 potential contract drafting nightmares and some tips on avoiding them:

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4 Ways to Leverage Your Legal Counsel in Contract Talks

Startups and small businesses are often hesitant to retain the services of legal counsel, generally due to concerns over the hefty price of such advice. This is certainly understandable, although it may end up proving costly in the long run. With contract drafting, in particular, it is very important to confer with legal counsel to ensure that the bargain struck is equitable and allocates risk appropriately. There may be issues down the road that lead to expensive litigation if a company fails to receive the input of an attorney with respect to a legally binding document such as a contract. Rather than be reactive and shell out a bunch of money for a lawyer to clean up such a mess, it is wise to be proactive and engage counsel as early as practicable. Here are four ways to leverage legal counsel when it comes to contract negotiation and drafting:

 

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How to Draft Usable Long-Term Contracts

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:

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