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5 Key Clauses Every Contract Lawyer Must Include In Commercial Contracts

Legal - Josephine - May 18, 2023

Commercial contracts are legally binding documents that require careful consideration and drafting. As a contract lawyer, being familiar with the five key clauses that must be included in all commercial contract agreements is essential. These clauses protect both parties and ensure their rights are secured. By including these clauses in each agreement, contract lawyers can help avoid potential legal disputes.

1) Definition of Terms

A definition of terms clause defines the words and phrases used throughout the contract. It ensures that everyone understands what is being discussed and helps prevent misunderstandings. This clause should include a clear outline of how the terms will be interpreted and an explanation of how they might change over time or if certain conditions occur.

2) The Parties Involved

It is important that every contract clearly states who is involved in the agreement. This includes the full name, address, contact details, company name (if applicable), etc. of each party to the agreement. This allows each party to know exactly who they are dealing with and provides a point of reference in the event of any later disagreements.

3) Responsibilities and obligations

The responsibilities and obligations clause defines each party’s role and outlines what tasks need to be completed by when. This prevents conflict between parties by ensuring that everyone knows what they have agreed to do before signing the agreement. In addition, this clause should specify any limitations or restrictions that come with fulfilling these responsibilities/obligations so that there aren’t any surprises down the line.

4) Performance measurement

Performance measurement clauses help define how success or failure within an agreement will be determined. They should detail how performance will be evaluated (e.g. through a third party assessment or customer feedback) and include specific metrics that must be met for success or failure (e.g. total revenue generated). Outlining this information upfront helps both parties understand what is expected of them moving forward and prevents unnecessary disagreements later in the process.

5) Dispute resolution

Dispute resolution clauses outline processes such as arbitration, mediation or dispute resolution boards that can help resolve conflicts without involving lawyers or the courts if necessary. This type of clause should also include details such as who will pay for expenses related to dispute resolution efforts and timelines associated with such activities (e.g., 30 days after notice has been given). Outlining these procedures in advance will increase efficiency when disputes arise, as all parties will know exactly what needs to happen next to move forward peacefully.

In conclusion, including these five key clauses in all commercial contracts drafted by a contract lawyer will ensure that the rights of both parties are protected while avoiding potential legal disputes down the line. By outlining expectations up front, better understanding each other’s roles, establishing performance criteria and having conflict resolution protocols in place, businesses can resolve issues quickly without escalating matters into costly litigation.

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