Building Strong Foundations: Key Elements of a Well-Crafted Contract 23rd February 2024 | IN EXPERT INSIGHT | BY SBID

A well-crafted contract serves as the cornerstone for successful collaborations and agreements. Establishing a solid foundation will support clarity, prevent misunderstandings, and provide a roadmap for all parties involved in the project, especially for managing variations, disputes and the provision of third-party services.

Here are some essential elements that contribute to the foundations of a good contract:

Clear Terms and Conditions:

The clarity and conciseness of appropriate terms and conditions sets the tone for a good contract. These should outline the rights, responsibilities, and obligations of each party involved. Ambiguities or archaic language can lead to disputes and complications, so it is part of good risk management to define expectations with precision.

Templates for terms and conditions are quite common and whilst they can be helpful, they can also generate a false sense of security so they should be used with great care. If you are minded to use a template then you should highlight clearly any clauses that must not be changed or removed. If you need to adapt aspects of your document for a particular project or client, then it is good practice, and we recommend, that you have those changes reviewed by a legal professional, such as Unity Legal Solutions to ensure you haven’t inadvertently undermined the effectiveness of your terms and conditions.

Dispute Resolution Clause:

Anticipating potential conflicts and establishing a clear dispute resolution mechanism is sensible and can be addressed by including a dispute resolution clause that specifies the procedures to be followed in case disagreements arise. Those procedures can include negotiation, mediation, arbitration, or litigation. This is a proactive approach and can save time, resources, and maintain the business relationship. It gives everyone a road map for dealing with the unexpected. It can be very tempting to put the dispute resolution clause at the end of the contract. However, and perhaps counter-intuitively, the placement of a dispute resolution clause near the top of a contract is strategic, effective and encourages collaboration. This pre-emptive information helps set expectations, allowing parties to understand the mechanisms for resolving disagreements before delving into the specific terms of the agreement. It can also deal with the differences between your services and third-party suppliers which is often overlooked.

Plain Language:

Using plain and straightforward language ensures that all parties can easily understand the terms and demonstrate transparency thereby reducing the risk of misinterpretation.

Structured Navigation:

Organising the contract in a logical and structured manner enhances its readability. Include headings, subheadings, and a table of contents to allow parties to easily navigate the document. A well-organised contract minimises the chances of overlooking significant details and facilitates quick reference to specific sections. If you use Adobe Acrobat, or similar software, then the table of contents will be activated with live links to the relevant sections.
Furthermore, a table of contents gives a sense of completeness and signals a structure which is easy to follow.

Performance Metrics and Milestones:

For contracts involving ongoing services or projects, defining performance metrics and milestones provides a measurable framework for success. This not only sets expectations but also allows for periodic evaluations and adjustments, ensuring that both parties stay on track towards achieving their respective objectives.

Digital Signing:

In the digital age, incorporating electronic signatures adds efficiency and security to the contracting process. Digital signing platforms offer a legally recognised and secure method for parties to authenticate their agreement, reducing the need for physical paperwork and expediting the execution of contracts. They also provide a record of amendments and variations.

The Right to Use Photographs:

Including a provision about the right to use photographs of the finished project in social media and other publications is a specific but important aspect of the designer/client relationship. Discussing it and including a specific clause at the beginning of the relationship signals consultation and consideration to the client and manages expectations of both the design professional and their client.

There are many other aspects to drafting a good contract. Some might be obvious, and some might be new to you. It is the combination of good drafting and coherent terms appropriate to the project or client, that makes the difference and that is rarely a DIY project.

For more information about how we can support you in your business, please contact us.

About Unity Legal Solutions

Unity Legal Solutions is not a regulated firm of solicitors although our people are mainly legal professionals. We provide initial advice and, if necessary, open the door to the legal market and help clients navigate the way forward to give them the best available options. We advise on disputes, commercial contracts, company matters and intellectual property which is so important to SBID members. We also offer a comprehensive mediation service in order to resolve disputes before they get out of hand. Our aim is take the worry out of facing legal issues by being clear, commercial, collaborative and friendly!

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