This article has been written by Bharti, pursuing a Diploma in International Contract Negotiation, Drafting and Enforcement from LawSikho.
This article has been edited and published by Shashwat Kaushik.
Table of Contents
Introduction
In today’s dynamic environment, the necessity to contract for professional as well as business purposes is crucial and very important to do compliance with the people. Contract drafting becomes our day-to-day business and job purpose. Without a contract, one can’t engage in business deals, as it helps in building legal business relationships. The main benefit of using customised contracts is that they have flexibility and control. It helps in tailor the contract by using negotiation, legal research, etc.
Contracts are fundamental and essential for business relationships, defining terms and conditions under which both parties agreed upon while entering into a business or professional relationship. Writing a legally binding document requires careful consideration of every word, clause, and structure. They are complex as well as difficult in nature, as they need a lot of legal work, legal research, law analysis, risk management, communication skills, and a lot of mental preparation before drafting it. So to prepare the contract, one should focus and have a good knowledge of laws prevailing at that time to customise it properly.
In this article you get to know about the importance of customised contracts and the need for change in traditional techniques of contract drafting and also cover the understanding of drafting the contract. You will also get to know the techniques and important points for drafting a legal, effective, and productive contract for your client.
Need for change in traditional techniques of contract drafting
There is a need to change the traditional techniques of drafting a contract as time changes as well as the environment also changes. With rapidly developing India and globalisation, there is a need to change the old techniques of drafting due to certain reasons:
- Prone to error: Contracts serve as the foundation for the business agreement. They define responsibility, obligation, rights, and duties. However, in traditional techniques they are very prone to errors because, at that time, there was no globalisation, industrialisation, as developed as today. So to meet the end of today, we have to adapt to the changing environment.
- Time-consuming: Traditional contract drafting consumes a lot of time as they are drafted by human hand and there were no computers and no digital facility as today. So to adapt to nature, we must learn new techniques of drafting digitally to make drafting easy and fast.
- High cost: Contracts were of very high cost in the past as they were made by humans physically. Now in today’s time, where we have advanced technology in computers to do all the work smartly and digitally, it decreases the burden on humans and, as a result, decreases the cost of drafting, making it more effective and easy to work.
- Inflexibility: Standardised contract drafting does not fulfil today’s needs of business arrangements and relationships. So to modify it, one has to adapt the new techniques of contract drafting to meet the basic requirements of business.
- Globalisation: Globalisation is the main important element in changing the traditional techniques to new ones. With the time, development in India increases and industrialisation, globalisation happens due to which various businesses develop and emerge with other countries, which leads to expansion in contracts between the parties.
- Severe to changing environment: Traditional techniques are ideal for that time, but in today’s scenario, time is changing rapidly. There is an urgent need to change the techniques to new ones to meet the needs of business requirements, as they are severe to changing environments.
Importance of customising a contract
Build trust of the client
A contract includes all the necessary legal points, terms and conditions, obligations, rights, and responsibilities in writing, which help in transparency and lead to building trust of the client
Provide legal enforceability
Customising the contract requires legal work and legal research, which is essential for drafting the contract.
Build good relationship between the parties
Customising a contract according to the need of the client and transparency leads to good communication between the parties.
Provide the negotiation
Negotiation is the essential part of the contract that provides the space or room for the changes in contract and chance to agree upon each other’s terms and conditions.
Prevents dispute between the parties
Customising contracts prevents the dispute between the parties to the contract in the future as they are legally enforceable and negotiated, which is agreed by both parties.
They guaranteed confidentiality
Contracts provide the guarantee to both parties for keeping their private and personal information by signing the NOC and MOU.
Thus, customising a contract becomes very important in today’s business life.
How to customise a contract
Identify your needs
Determine or identify the needs of your client that he/she wants to include in their contract. Identify such terms as certain terms about privacy, intellectual property, confidential clause, or a termination clause.
Research legal requirement
You need to do some legal research while drafting any contract and familiarise yourself with current laws such as contract laws, IP laws, bank laws, etc. for your client. Research about the particular laws or consult an attorney for legality.
Gather sample contract
Look for the sample contract for your contract and take the idea for drafting your client’s contract. Gather some ideas and analysis through online resources, professional organisation material, or other lawyer projects to start with.
Write clear and concise clauses
Use simple language for your drafting instead of using complex and hard language. Keep in mind the clauses and needs of your client; draft a contract with headings, footnotes, sections, and sub-sections that are easily understandable by both parties.
Include essential clauses
Draft or customise your contract using essential clauses that should be there in every contract. This shows your interest in project of your client. Some of the essential clauses are:
- Confidential clauses
- Termination clauses
- Intellectual property clauses
- Dispute resolution clauses
- Service payment clauses
- NOC and MOU
Seek legal advice
It is best to show the contract to an attorney for a legality check before finalising the contract. Seek some legal advice from an attorney for the legality of the contract, as it helps in decreasing the errors and any type of problem in the future.
Best practices for contract collaboration
- Establish clear roles and responsibilities:
- Define the roles and responsibilities of each party involved in the contract collaboration process.
- Identify the decision-makers and their authority levels.
- Assign specific tasks and timelines to ensure efficient workflows.
- Open communication channels:
- Establish regular communication channels, such as weekly video conferences, email threads, or instant messaging platforms.
- Encourage transparency and open dialogue to address concerns and share ideas.
- Implement a collaborative project management tool to facilitate communication and track progress.
- Set clear objectives and goals:
- Define the specific objectives and goals of the contract collaboration process.
- Align stakeholders’ expectations to ensure that everyone is working towards the same outcome.
- Create a shared understanding of what success looks like for all parties involved.
- Leverage technology:
- Utilise contract management software or platforms that facilitate collaboration and streamline the contracting process.
- Implement e-signature solutions to expedite the execution of contracts.
- Use collaborative document editing tools to allow multiple parties to work on contracts simultaneously.
- Foster a collaborative mindset:
- Encourage a collaborative mindset among all stakeholders.
- Emphasise the benefits of teamwork, shared decision-making, and open communication.
- Promote a culture of respect, understanding, and trust.
- Provide adequate resources:
- Allocate sufficient resources, including time, budget, and personnel, to support effective contract collaboration.
- Ensure that all parties have access to the necessary tools, training, and support.
- Create a conducive environment for collaboration.
- Monitor and evaluate progress:
- Regularly review the progress of the contract collaboration process.
- Identify any challenges or bottlenecks and develop strategies to address them promptly.
- Evaluate the effectiveness of the collaboration process and make improvements as needed.
- Seek legal counsel:
- Involve legal counsel throughout the contract collaboration process to ensure compliance with applicable laws and regulations.
- Seek guidance on complex legal matters and contract terms.
- Document decisions and agreements:
- Document all decisions, agreements, and changes made during the contract collaboration process.
- Maintain a central repository for all contract-related documents.
- Ensure that all parties have access to the latest versions of contracts and supporting documentation.
- Celebrate success:
- Recognise and celebrate successful contract collaborations.
- Share positive outcomes and lessons learnt with the wider team.
- Foster a culture of continuous improvement and learning.
How to finalise the contract
Revise with the attorney
Customisation of a contract is incomplete without revision with an attorney to check the legality of the contents of the contract. It is important so that there is no problem in enforcing the contract in the future because contracts are full of nuance and complexity.
Ready for negotiation
In business and professional dealings, one should be ready for the negotiation by both parties, as negotiation is an essential and utmost part of the contract. One should know where to compromise and where to stand firm
Signing of both parties
Finalising a contract is completed when both parties agree upon the terms and conditions and contents of the concerned contract by signing the contract from both parties physically and electronically. Contracts are legally binding upon both parties and are enforceable by the law. So it is important for the contract to be signed for future enforcement of any case.
The evolving potential in customised contract drafting
Customised contract drafting has lots of potential in today’s world; not only can it cater to the market, but it also has a very good potential in careers to start. It has a very good hope to start the career in drafting the various contracts for companies, banks, legal firms, MNC’s, or other business ventures.
Customisation of contracts helps financially as well as practically in our day-to-day lives, such as giving the idea of legal terms, important precautions to be taken while involving others professionally, responsible sourcing, and ethical business practices, as well as helping in approaching anyone legally. It not only has scope for expanding the business, but it also addresses sustainability and environmental, social, and governance considerations.
Thus, customised contract drafting is a gem in the business market in today’s world for everyone involved in business or any other professional relationship.
Conclusion
Contracts outline the terms and conditions of the business and professional agreement and outline each party’s responsibility, duties, and rights that are legally binding upon the parties to the contract. Customisation of the traditional techniques of drafting contracts is becoming really important in today’s environment due to globalisation and industrialisation in India.
Due to dealing in import and export internationally and globally, one should know the importance of the need for customisation in traditional techniques of drafting. This would help in expanding the business smoothly and softly.
Lastly, contracts are a valuable part of daily business dealings. Not only do they provide the firmness or legality to the business, but they also help in creating good relationships between the parties as there is scope for clarity, transparency, and enforceability. A good contract is that which improves the compatibility, relationship between the parties, transparency, clear points, and detailing of each and every clause.
References
- https://juro.com/ https://www.mydock365.com/
- https://weareindy.com/blog/how-to-create-a-custom-contr act-for-your-business-tips-and-tricks
- https://www.adobe.com/acrobat/business/resources/how-t o-write-a-contract.html https://legittai.com/blog/contract-customization
