Drafting of a contract : what makes it a necessity

November 11, 2021

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This article is written by Pratyush Bhattacharjee, of Symbiosis Law School, Noida. This article seeks to unveil the essential nature of drafting as a skill for law students and professionals.

Table of Contents

Introduction

A contract is a legally binding document between two or more parties that defines and governs the rights and duties of the parties to an agreement.

Drafting a contract is the process of explicitly writing down the terms and conditions of an agreement and the goal of contract drafting is to create a legally binding document in writing that is clear, concise, and as close to the parties’ intentions as possible. It is one of the basic skills that all lawyers, irrespective of the area they specialize in, are expected to possess.

Drafting of a contract : importance and objective

Contracts are omnipotent since we are exposed to them in almost all areas of our life. Agreeing to the terms and conditions while accessing a website, hiring a cab, or even ordering a meal are examples of contracts that we create on a regular basis. Thus, the knowledge of drafting a contract is beneficial not only to people belonging to the legal profession but also to people from non-legal backgrounds.

What is the purpose behind drafting a contract? Before answering this question let us think of an example of a rental agreement between two parties where A has agreed to sell B goods worth a certain amount. What would happen if A decides to take the money and refuses to perform his part of the agreement?

The purpose behind drafting a contract is to write down and identify the terms of the promises exchanged between the parties to an agreement and also address what would happen in the scenario where one party refuses to perform their part of the agreement. Putting it simply, drafting a contract provides certainty to the terms agreed upon by the parties.

In the above-mentioned example, a well-drafted contract can enable the aggrieved party, B, to recover the money depending on the remedies mentioned in the contract. It can allow B to demand specific relief or to simply terminate the agreement as well as any other provision to settle the dispute if mentioned in the contract.

The skills required to draft a good contract

The first element necessary for drafting a contract without flaws comes before the drafting process itself. It involves communicating with the client about the agreement between the parties, relevant facts and the client’s intentions to create an outline for the contract.
While drafting a contract, one has to ensure that the language is clear and devoid of any ambiguity. The use of legal jargon unnecessarily should be avoided since a person not having a legal background should still be able to clearly understand the terms of the contract. The goal is to be able to think like a lawyer but not write like one.
Having concrete knowledge of the provisions of the law relevant to the contract is one of the most essential skills necessary for drafting a proper contract. Understanding the law to its full extent and interpreting it in a way for all the parties to easily comprehend is crucial in the process.
A good contract should be complete in the sense that it should be devoid of any loopholes and be able to deal with and protect the client against all the potential issues which might arise.
One should also be able to negotiate the terms of a contract between the parties to come to a mutual agreement.
Setting up a plan before beginning to draft helps in making it easier to fulfil the objectives of a contract.
Having a solid grasp of the English language is perhaps the most basic but unavoidable skill required since the clarity and overall quality of a contract is first and foremost determined by control over the language it is to be written in.

What are the essentials for a well-drafted contract

Format – While there is no particular format to be followed for a written contract, there are some essential terms that are required to be present for a legally binding contract such as, “An offer shall not be against public policy, such as involving an illegal act or fraudulent transactions”, “valid offer”, “acceptance of the offer” etc.
Specifying the parties– Consideration and timing of services, it is mandatory for a contract to specify the names of the contracting parties, irrespective of them being an individual or business entity. The consideration involved in the transaction and the time of the transactions should also be clearly stated.
Defining the services to be performed – The scope of work for which the parties come into an agreement should be defined. The obligations and duties of each party should be specified.
Completion of contract – The purpose of a contract is over once each party performs their part of the agreement. Thus, it becomes important to define the timing of all transactions or services involved. The contract should include a clause that defines its period and a provision for termination once the purpose is served.
Provisions for resolving disputes – It is fairly common for grievances to arise between parties to a contract. Including provisions for dispute resolution in advance is a requirement.
Defining jurisdiction – While not entirely necessary, the parties may choose to predetermine which court(s) have jurisdiction to approach to settle any possible disagreements.
Specific Clauses – Certain special clauses can be entered into a contract to tighten the protection of a client’s interests. A good example of such a clause which gives direction to the parties to handle specific situations which may arise in the future.

Should drafting of a contract be made mandatory for law students

The skill of drafting contracts is necessary for all lawyers across the board. Even lawyers specializing in litigation or disputes often involve themselves in commercial practice as well, where the focus is primarily centred around contractual disputes. In fact, most of the work related to arbitration revolves around contracts. Restructuring, as well as Insolvency and Bankruptcy Code-related work also requires contractual knowledge.

This goes to show just how important the knowledge of drafting can be to people in the legal profession and law students. While most law colleges introduce drafting as a subject towards the end of the program (typically in the fourth year for most 5 year courses), it is simply not a skill that students can learn in such a short period of time. It also makes young lawyers try to learn these skills on the fly after graduation or while working, which is not necessarily the best way to learn. Moreover, drafting skills become a very useful tool when students start serious internships from the second or third year but since drafting is not taught early on, it can result in a lot of missed opportunities for the students. Imagine yourself as a third-year law student who does not have any prior exposure to drafting and you are trying to secure an internship in a law firm.

While to you, it may be an opportunity at learning how to draft, another student who is already acquainted with the skill has a better chance of being accepted since the employers would prefer to choose someone with at least some experience in drafting compared to someone who has to be taught from square one. When a client asks to draft a joint venture agreement or a joint negotiation agreement, to meet the requirements for drafting such contracts, one requires a different set of training to acquire these skills since they are not taught in most law schools.

Instead of primarily focusing on teaching the law itself, law schools should make it a point to include contract drafting as a core subject early on in the syllabus for law students. Contract law is one of the first introductions for first-year law students, thus, teaching drafting along with the law of contracts should be a welcome change since the two go hand in hand. This would further enable them to develop a firm grasp of the skill and since they would already know the basic knowledge of drafting, it would help them perform better at internships since instead of having to learn drafting from the ground up, they would be able to focus on improving their skills at the craft.

The necessity behind acquiring contract drafting skills

Why is it so necessary to learn drafting in the first place? While drafting is just one of the wide range of skills to be accumulated in the legal profession, it falls within the essentials due to its widespread requirement in various legal fields. If you’re working at a law firm that deals in dispute resolution or mergers and acquisitions, chances are, a large fraction of your work will involve drafting and reviewing contracts which makes the knowledge of drafting an absolute necessity.

Not being well acquainted with the drafting skills can prove to be immensely detrimental to the clients as well as the lawyer drafting the contract since it increases chances of making mistakes which can compromise the validity of a contract in the eyes of law and also not fulfilling their interests due to errors made during drafting.

Apart from the obvious reasons to acquire drafting mentioned above, working on your drafting skills can drastically enhance analytical prowess due to the fact that you are required to carefully delve into each and every aspect while examining or drafting a contract in order to protect your client’s interests.

Being skilled at drafting also adds the perk of negotiation skills since both are complementary to each other. Contract negotiation involves discussions and compromises in order to reach a final agreement by the parties to the contract. In order to draft a contract that fulfils the client’s interests and is acceptable to both parties, it becomes essential to be able to strike a balance between the interests and rights of the parties. Hence, as you keep improving your drafting skills, negotiations skills will follow.

What makes contract drafting a rewarding skill to possess

Contract drafting along with negotiation can prove to be a very valuable and rewarding asset for all areas of legal practice. Both law firms and individual lawyers usually earn a significant portion of their revenue through drafting since it is a highly reliable and profitable revenue stream. Harnessing this skill allows even nascent lawyers to obtain a reliable income source.

For many young litigators who are trying to succeed as arguing counsel, the monetary reward from this arena of legal practice can often prove to be limited. Thus, contract drafting can offer such professionals a secondary source of income.

Contract drafting is also a very essential part of the big law firms since they can make a lot of money from transactional practices such as Mergers & Acquisitions, Corporate Finance or Banking which involve a large amount of drafting and negotiation.

It is therefore obvious that a lawyer in most fields will benefit tremendously from systematically learning contract drafting and negotiation.

Conclusion

Being able to draft a good contract is a direct display of one’s skills as a legal professional. It, therefore, is not a surprise that drafting is seen as one of the most important skills to imbibe in this profession.

In order to ensure the preservation of a client’s best interests, the skills needed to draft a contract and come to favourable terms by negotiating is crucial. Since it is largely a writing skill, it can always be improved through practice and it pays off to learn it at an early stage as it provides one with more time to develop and test their skills on the field. It is a valuable skill that can create better opportunities for lawyers across various fields.

References

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