5 Common Contract Drafting Mistakes

Both experienced and inexperienced contract drafters can make costly mistakes while creating contracts. Glossing over the contract formation stage is unwise. Painstaking care should be taken to make sure that all the details of an agreement are spelled out. To help guide you with your next contract, below are five of the most common mistakes to avoid.

  1. Inadequately Describing the Parties’ Duties and Responsibilities

A well written agreement should carefully set out the duties and responsibilities of each contracting party.  The duties and responsibilities of each party must be explicitly stated to avoid ambiguity or discord later down the road.  Avoid using generic words and describe with specificity each parties’ duties and responsibilities.

  1. Allowing One Side to Draft the Contract

If one party drafts the entire contract, they have the advantage of putting in terms and conditions that are most favorable to them. They could end up sending you a lengthy document that you merely “skim,” resulting in terms or conditions that favor one party over another, and potentially leading to costly conflicts and possible litigation later.

  1. Failing to Outline Dispute Resolution

Often times the parties will draft a great and detailed contract, but neglect to provide for a mechanism for dispute resolution. It is important to have terms in the contract that will guide how to address a conflict or dispute, such as an arbitration clause or a forum selection clause.

  1. Failing to Establish a Contract Endgame or Termination Provision

If a contract does not have a term or end date there is a risk of ambiguity that could obligate a party beyond the period desired.  Likewise, these provisions can often implicate time and costs, especially when they establish the when, why, where, and how in circumstances like winding-up, the ramifications of a default, and/or the failure to cure a breach.

  1. Working Without an Attorney

Some agreements are so basic that an attorney may not be necessary, and a standard form contract might be sufficient. More often than not, however, transactions operate more smoothly with the help of an attorney. An experienced attorney will have an eye for specific issues to spot, will know what terms to look for and avoid, will scour the document, and will advocate for you in the drafting process.

Ezer Williamson Law provides a wide range of both transactional and litigation services to individuals and businesses. We have successfully prosecuted and defended various types of business and property claims. Contact us at (310) 277-7747 to see how we can help you with your business law concerns.

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