This article will focus on three important factors that should be considered when drafting contracts. Please note that “a contract is an agreement that is intended to create legal rights and duties between the parties”*1 . Furthermore, a contract can take various forms which could be that, “it can be written down or typed out, it can be verbal, or it may even just exist in the minds of the parties. Many people think of a ‘contract’ as a piece of paper that you need to sign, but a piece of paper or a signature is not always needed for a contract.”*2
FACTORS TO CONSIDER WHEN DRAFTING
Prepare for Litigation
An important factor that should be considered from the time a contract is being drafted is to prepare for litigation. You may not want to litigate, but sometimes even the best relationship experience problems, “the goal of drafting a good contract is to avoid ending up in court. Nonetheless, you should draft a contract as if you are expecting every term in it to be fully litigated. If a term is important to your client, make sure there is no ambiguity as to what is required, when it is required, who it is required of.”*3 In other words, aim to eradicate and/or minimise risk to your client.
In Principles of Effective Drafting*4 , Jim St Clair makes the point that, “contract drafting is different from all other types of writing, including other types of legal writing.”*5 Effective contract drafting can be achieved by adopting an uncomplicated approach. Accordingly, “each point in a contract should be expressed as simply as possible. The benefits of simplicity are many. Simple provisions are easier to read and understand. Simple provisions in a draft agreement are easier to negotiate and rewrite.”*6 In addition, issues surrounding the interpretation of the terms of a contract can be avoided as simplicity can add to the preciseness of a contract.
Some authors on the topic of simplicity are of the view that “Latin words and phrases are familiar to few. Most can and should be translated into the language of the work one is writing.”*7 This is clearly a subject of debate as various people who draft contracts possess a combination of personal drafting styles.
Contract negotiations may be necessary to conclude certain contracts and the negotiations will therefore become part of and influence the drafting process. Should negotiations be necessary, one must remember to, “ensure consensus – minute meetings and agree on content and have a ‘WWW’ (who, what and by when) action list. Confidentiality is crucial – all parties involved in the negotiating process to sign a confidentiality, non-disclosure and non-circumvention agreement (‘NDA’) at an early (as possible) stage. Ensure that the party you are negotiating with is not only a decision maker, but is also duly authorized to enter into discussions with you and to sign the ultimate contract.”*8 Finally, parties should always remember to prepare adequately before commencing with negotiations.
There are numerous other factors that should be considered in drafting a contract, we have only briefly mentioned some above in this article. It is therefore important as a starting point to determine the type of contract required in order to be able draft the contact to meet the client’s needs. We can assist you in the drafting of all of your contracts as well as the negotiation and conclusion of same.
*1 Western Cape Office of the Consumer Protector, What You Should Know about Contracts, August 2009, pg 2
*2 Western Cape Office of the Consumer Protector, What You Should Know about Contracts, August 2009, pg 2
*3 Matthew Hickey,
*4 Jim St Clair, Principles of Effective Drafting
*5 Jim St Clair, Principles of Effective Drafting, Chapter 4, pg 64
*6 Jim St Clair, Principles of Effective Drafting, Chapter 4, pg 74
*7 Carole Lewis, Good legal Writing, December 2009, pg 23
*8 Advocate Louis Nel, Requisites for a legally binding Contract, February 2010