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How will the contract be performed? One of the most important things that should be included in the contract is how each party is obliged to fulfil their part of the contract. Try to make it clear at what point in time both parties will be expecting progress. If the buyer needs to do something so that the contract can proceed, make sure that they are aware of this, and that it is written down. If necessary you could make a list detailing exactly what the other side should and should not be doing. If something may jeopardise the performance of the contract, then make sure that the buyer is aware of this and once again it is provided for in the contract. When will the goods be delivered, or the contract performed? Delivery can also be another contentious point in a contract. Any delivery dates should be negotiated carefully. Try to plan ahead and make sure that you are able to perform the contract by the arranged date. The same principle applies to an anticipated contractual performance date. Make this as realistic as you can - if you think it necessary, agree and document a timetable. Many contracts have a liquidated damages clause which, means that the seller has to pay damages to the buyer should they deliver late. The amount agreed under this clause is highly negotiable, but essentially should reflect any losses the buyer will face if the contract is not performed on time. Termination clauses Each parties will want to specify the circumstances under which they can terminate the contract and walk away. The contract should have a termination or renewal date which allows either party to bow out at some stage. You should also lay out any required notice periods. Although it is not a business friendly term to negotiate, it is a good idea to have a termination clause based on performance of the contract by both sides. If the contract is not performed correctly, then either side should be able tp terminate it without notice. Depending on what is agreed, this clause can go into quite a bit of detail listing the situations in which termination would be appropriate. Other important issues Other important issues covers areas such as intellectual property ('IP') rights under the contract and any security that is to be provided. If you are dealing with IP rights then you should always seek legal advice from an experienced IP solicitor. Protecting and trading IP involves using complex areas of law. The correct formalities and methods of protection need to be used so that IP rights are not infringed and in the event of an infringement you are able to seek a compensatory remedy. If the buyer is providing any security for the contract such as a guarantee, lien or pledge, then this should be included in the terms of the contract. Standard terms and conditions Most commercial businesses or sole traders have a set of standard terms and conditions, which they apply to their contracts. These contain information such as interest rates for late payment and liability under the contract. When attaching these standard terms, check that they don't conflict with anything which has been agreed bespoke to the contract. If you find a conflicting term then you must decide upon which is more favourable and highlight any changes to the buyer. If you are a new business solicitor and have yet to come up with your own standard terms and conditions - seek legal solicitor assistance when drawing them up. An experienced commercial solicitor will check that your standard terms are both comprehensive and legally fair. Once they have been designed, you should be able to apply them to most contracts. Another helpful piece of advice is to try and incorporate a copy of your standard terms and conditions on any invoices or delivery notes for the buyer's information.
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