Contracts
Drafting Commercial Contracts: Common Mistakes and How to Avoid Them
Most contractual disputes do not arise from bad faith, but from an ambiguous clause that could have been clarified in one line.
A good contract is not the longest one; it is the one that needs no interpretation when a disagreement arises. Most disputes that reach litigation trace back to a clause that could have been written more clearly.
Four clauses worth extra time
- Scope of work: what the contract expressly covers, and what it expressly does not.
- Pricing and adjustment: when consideration changes, and by what procedure.
- Termination: who may terminate, on what notice, and what happens to amounts due.
- Dispute resolution: the competent forum, the governing law, and the language of proceedings.
A simple test before signing
Read the clause and imagine the other party interpreting it in the way least favourable to you. If the wording still supports more than one reading, the clause needs redrafting not good faith.