CONTRACT DRAFTING AND CONTRACT REVIEW

Drafting is the process of preparing a contract clearly stating all the terms and such contract should contain all the essentials of an agreement enforceable at law. It is a critical process which includes what situations the contract must cover. One should prepare more than one draft so that it becomes easy to review and revise it. It is advised to use simple, clear and formal language while drafting and avoid using technical terms unnecessarily. Every clause should specify one particular area and should not overlap with other. Revising the contract is important as it removes the flaws and improves the transitions, grammar, punctuation and sentence structuring. While drafting one should check on—

• Accuracy – statement of content accurately, free from ambiguity.
• Readability – clearly structured, concise and removal of unnecessary modifiers.
• Style – consistency of the paragraphs and sentences.

A contract, in general, should contain important points like, title, preamble, definitions, consideration, covenants, representations and warranties, indemnification, breach and cure, termination, remedies, risk allocation (force majeure clauses), arbitration clause, amendment, survival, wavier, limitation, liabilities, confidentiality, etc.

Contract reviewing in simple words mean thorough analysis of the contract which includes clarification of the facts, measures on the feasibility of contract and risk management. It is important before signing since it saves people from a legal mess. One should know exactly what he/she is affirming to by signing the contract and make sure of all the legal aspects to avoid further legal complications. The contract is a crucial legal document which affects operation, management, business activities, foreign economic activity, legal rights, and obligations and interests.

While reviewing one should carefully analyze the subject-matter, general information, qualification, credibility & contractual capacity, maintenance & preservation, Intellectual Property Rights, confidentiality clause, dispute settlement, amendment, cancellation, termination of contract, seal & signature, authorization, force mature, etc.

Contract review checklist is prepared to provide limited list of provisions which should be considered before signing the contract, such as, identification of parties, negotiation of the terms, no blank space, cross-checking of business terms, risk allocation, indemnification provisions, documents of incorporation, events of default, termination causes, deadlines, warranties, dispute resolution, etc.