BackDownload
Copy
Polish
Create Draft
Details
Clean contracts are essential for smooth business operations. They help avoid misunderstandings and legal issues. This blog post shares tips from Matthew Bovee Brunken PC on crafting clear agreements.
Clear language and detailed definitions are key to strong contracts. Use simple words and explain technical terms. Include schedules or diagrams to clarify complex ideas. This makes your contract easier to understand and follow.
Regular reviews of your contract process can lead to improvements. As your business grows, your needs may change. Update your methods to stay efficient and effective. This keeps your contracts in line with current best practices.
Use clear language and detailed definitions in contracts
Include visual aids like schedules and diagrams for clarity
Review and update your contract process regularly
Contract law forms the backbone of business and personal agreements. It sets rules for creating valid contracts and enforcing them. Knowing these basics helps you make strong deals and avoid problems.
A contract is a legally binding agreement between two or more parties. It creates rights and duties that the law will enforce. Contracts are vital for business and everyday life.
They protect your interests when making deals. You use contracts when buying a house, starting a job, or getting cell phone service.
Contracts bring order to transactions. They spell out what each side must do. This clarity helps prevent misunderstandings and disputes.
For a contract to be valid, it needs certain key parts:
Offer: One party proposes terms for an agreement.
Acceptance: The other party agrees to those terms.
Consideration: Each side gives up something of value.
Capacity: Both parties must be legally able to enter a contract.
Legality: The agreement's purpose must be lawful.
You need all these elements for a contract to hold up in court. Missing any can make the contract unenforceable.
Clear writing is crucial in contracts. It ensures both parties understand their rights and duties. Vague terms can lead to fights and lawsuits.
Use simple words and short sentences. Avoid legal jargon when possible. Define any technical terms you must use.
Be specific about important details like:
Deadlines
Payment amounts
Quality standards
What happens if someone breaks the contract
Clear language protects you and the other party. It reduces the chance of misunderstandings or disputes later on.
Matthew Bovee Brunken's method for clear contracts focuses on simplicity and precision. His approach helps create agreements that are easy to understand and follow.
Bovee Brunken stresses the need for plain language in contracts. You should avoid legal jargon when possible. Use short sentences and simple words. This makes the contract easier to read for all parties.
Break down complex ideas into bullet points or numbered lists. This helps readers grasp key concepts quickly. Use bold text for important terms or deadlines.
Include examples to explain tricky parts. This can prevent misunderstandings later. Always define technical terms clearly at the start of the document.
Start with a clear outline. Plan your contract's structure before writing.
Use active voice. It makes your writing more direct and clear.
Be consistent with terms. Don't switch between different words for the same thing.
Add headings and subheadings. They make the contract easier to navigate.
Keep paragraphs short. Aim for 3-4 sentences at most.
Use tables for complex information. They can make data easier to understand.
Review and revise. Always check your work for clarity and mistakes.
Careful planning before drafting a contract sets the stage for a successful agreement. Taking time to clarify goals and understand all parties' needs helps create a solid foundation.
Start by clearly defining what you want to achieve with the contract. Write down your main goals and priorities. Consider both short-term and long-term objectives.
Ask yourself:
What are the key deliverables?
What timeline do you need?
What are your deal-breakers?
Make a list of must-have items versus nice-to-have elements. This will guide your drafting and negotiation process. It also helps you stay focused on what's most important.
Put yourself in the other party's shoes. Try to anticipate their goals, concerns, and potential objections. This allows you to address issues proactively in your draft.
Research the other party's business and industry. Look for any recent news or changes that may impact the deal. Consider their possible motivations and constraints.
Prepare answers to likely questions or pushback. Think about areas where you can offer flexibility. Identify potential trade-offs that could satisfy both sides' needs.
Being prepared with this information helps you craft a more balanced initial draft. It also positions you for smoother negotiations later on.
A well-structured contract is clear, logical, and easy to understand. It helps both parties grasp their rights and obligations quickly.
Start your contract with a table of contents. This gives readers a quick overview of what's inside. Use clear, descriptive headings for each section. Group related topics together.
Put the most important information first. This includes key terms, payment details, and main obligations. Less critical items like boilerplate clauses can go near the end.
Use numbering and bullet points to break up text. This makes the contract easier to read and reference. Consider using a two-column format for definitions or short clauses.
Begin with an introduction that states the purpose of the contract. Follow this with definitions of key terms used throughout the document.
Next, outline the main agreement. This includes what each party will do, when they'll do it, and how much it will cost. Add sections for special conditions or exceptions.
End with standard legal language. This covers things like dispute resolution, governing law, and termination procedures.
Use transition phrases between sections. This helps readers follow the contract's logic from start to finish.
Be specific, but don't overdo it. Use plain language instead of legal jargon. Break long sentences into shorter ones.
Include examples where needed. This can help clarify complex ideas or processes.
Use tables for things like pricing or delivery schedules. They're easier to read than long paragraphs of text.
Leave white space on the page. Dense blocks of text are hard to read. Use headings, subheadings, and short paragraphs to create visual breaks.
Consider adding a summary sheet. This can highlight key points for quick reference.
Clear contract language is key. Precise words, unambiguous phrasing, and well-defined terms help prevent misunderstandings and disputes.
Pick words that clearly express your meaning. Use specific nouns instead of vague pronouns. Replace general verbs with more exact ones. For example, say "deliver" instead of "send" when talking about product shipments.
Avoid jargon unless needed for technical accuracy. If you must use specialized terms, define them.
Use consistent language throughout. Don't switch between synonyms, as this can create confusion.
Be specific about dates, times, quantities, and other measurable details. Instead of "soon," say "within 30 days."
Remove words that can have multiple meanings. "Reasonable" is open to interpretation. Give exact standards instead.
Use active voice to clarify who does what. "The seller will ship the goods" is clearer than "The goods will be shipped."
Break complex ideas into shorter sentences. This reduces the chance of misreading.
Create a definitions section at the start of your contract. List important terms and their exact meanings.
Be thorough in your definitions. Cover all aspects of a term that matter for the agreement.
Use capitalization to flag defined terms in the main text. This reminds readers to check the definitions.
Update your definitions if you change how you use a term later in the contract. Make sure the meaning stays consistent throughout.
A careful review and editing process is key to creating clean, effective contracts. This involves internal checks and external expert input to catch issues and refine language.
Start by reading the contract slowly and carefully. Look for unclear terms, inconsistencies, or missing information. Check that all names, dates, and amounts are correct. Make sure each section flows logically.
Use track changes to mark edits and add comments. This helps you keep a record of changes and explain your reasoning. Have at least one other person on your team review the contract too. Fresh eyes often spot things you may have missed.
Create a checklist of common issues to look for. This can include things like defined terms, governing law clauses, and signature blocks. Go through your list methodically for each contract.
Hire an experienced contract lawyer to review important agreements. They can spot legal issues you might not be aware of. A lawyer can also suggest better ways to phrase certain clauses.
Be clear about what you want the lawyer to focus on. Give them background on the deal and any specific concerns. Ask questions if you don't understand their feedback.
Consider having the other party's lawyer review the contract too. This can help catch potential disputes early. It also shows good faith in wanting a fair agreement for both sides.
Get legal input early in the process. It's easier and cheaper to fix issues before negotiations are far along. Budget time and money for legal review in your contract timeline.
Good contract formatting makes documents easier to read and understand. Clear organization helps both parties quickly find key information and terms.
Headings break up long contracts into logical sections. Use a consistent heading hierarchy throughout. Start with main section headings (H1), then use subheadings (H2, H3) for subsections.
Make headings descriptive but concise. "Payment Terms" is better than "Section 4." Number headings to allow easy referencing.
Use heading styles in your word processor. This creates an automatic table of contents and allows for easy navigation in digital versions.
Bullet points and numbered lists improve readability. Use them for:
• Key contract terms • Steps in a process • Required documents • Responsibilities of each party
Keep list items short and start each with the same part of speech (nouns or verbs). Use numbers for sequential steps and bullets for unordered items.
Indent lists to set them apart from surrounding text. This makes them easy to spot when scanning the document.
Choose a professional, easy-to-read font like Arial or Calibri. Stick to one or two fonts throughout the contract.
Use a font size between 11 and 12 points for body text. Make headings slightly larger and bold.
Set consistent line spacing, usually 1.15 or 1.5 lines. Add extra space before and after headings.
Use uniform margins, typically 1 inch on all sides. Justify text for a clean look, but be careful of large gaps between words.
Keep paragraph formatting consistent. Either indent the first line or add space between paragraphs, but not both.
Attachments and schedules play a key role in contracts. They let you add important details without cluttering the main text. Using them well helps keep contracts clear and complete.
When adding attachments to a contract, always refer to them clearly in the main text. You might write: "See Schedule A for a full list of company assets." This connects the attachment to the contract.
Make sure all attachments have clear titles and numbers. Label them as "Exhibit 1" or "Schedule B" to avoid confusion.
Check that the information in attachments matches what's in the main contract. Any conflicts can cause problems later.
Keep attachments simple and focused. Each one should cover a specific topic. This makes them easier to update if needed.
Consider using tables or bullet points in attachments. These formats can make complex information easier to read and understand.
Always include attachments when you sign the contract. Missing attachments can lead to disputes.
Effective contract risk management helps protect your business interests and prevent costly disputes. Clear language and careful planning are key to addressing potential issues before they arise.
Use precise wording in your contracts to avoid misunderstandings. Define key terms clearly to ensure all parties are on the same page. Include specific performance criteria and deadlines to set clear expectations.
Add dispute resolution clauses that outline how conflicts will be handled. This can include steps like mediation or arbitration before litigation. Specify governing law and jurisdiction to clarify which rules apply.
Include force majeure clauses to address unforeseeable events outside of either party's control. List examples of qualifying events and explain how they'll impact contractual obligations.
Spell out what constitutes a breach of contract in clear terms. Define material vs. non-material breaches and their consequences. Include notice and cure provisions to allow time for fixing minor issues.
Specify remedies for different types of breaches. This may include:
Monetary damages
Specific performance
Contract termination
Add limitation of liability clauses to cap potential damages. Be specific about what types of losses are covered or excluded. Consider including indemnification provisions to protect against third-party claims.
New tools are changing how lawyers create and review contracts. These advances make the process faster and more accurate.
Contract management software helps you organize and track agreements. You can store all your contracts in one place. This makes it easy to find what you need. The software also sends reminders about key dates and deadlines.
Many programs let you create templates for common contracts. This saves time and keeps your agreements consistent. Some tools can even spot missing clauses or risky terms.
You can also use the software to track negotiations and approvals. This creates a clear record of how each contract developed.
AI is making contract review quicker and more thorough. These tools can scan long documents in seconds. They flag potential issues and suggest changes.
Some AI programs compare your contracts to industry standards. This helps you see how your terms stack up. Others can spot unusual clauses that might need a closer look.
AI can also help predict how certain terms might play out in real life. This can guide your negotiation strategy. As AI improves, it will likely take on more complex analysis tasks.
Clear contracts are key for smooth business deals. These questions cover important aspects of creating and reviewing effective agreements.
Use plain language. Avoid legal jargon when possible. Define key terms clearly. Organize the contract logically with headings and subheadings.
Keep sentences short and to the point. Use numbered or bulleted lists for multiple items. Include a table of contents for longer contracts.
Make sure all parties have legal capacity to enter the agreement. Get signatures from authorized representatives. Include consideration - something of value exchanged.
Be specific about performance requirements and deadlines. Add a governing law clause. Avoid terms that could be seen as unfair or against public policy.
Define important terms in a separate section. Use consistent wording throughout. Avoid vague phrases like "reasonable efforts" without explanation.
Include examples or formulas for complex concepts. Use "shall" for obligations and "may" for permissions. Spell out numbers and percentages.
Start with a term sheet outlining key points. Focus on interests, not positions. Use "if-then" scenarios to explore options.
Agree on standards or metrics for vague terms. Build in flexibility with amendment processes. Consider mediation clauses for dispute resolution.
Add a detailed scope of work or deliverables section. Include specific timelines and milestones. Clarify payment terms and conditions.
Outline procedures for changes or termination. Address intellectual property rights. Include confidentiality and non-compete clauses if needed.
Check defined terms for accuracy and consistency. Review obligations and rights of each party. Look for ambiguous or conflicting clauses.
Examine payment and performance terms. Verify dispute resolution procedures. Ensure all referenced documents or exhibits are included.