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Seven tips for drafting watertight contracts

by , 31 July 2013
Good draftsmanship is the key to trouble-free contracts. And that's why the drafter of a contract should have at least a working knowledge of the industry, as principles, technical terms and other commercial considerations vary between different industry sectors. This can have a significant effect on the meaning of the contract. But this is just one important aspect you must take into account when you've appointed someone to draft a business contract for you. Read on to discover the other seven tips you should keep in mind to ensure your contracts are watertight.

Don't take a chance and hope for the best when it comes to your business contracts. This could cause endless problems and end up costing you a lot of money!

That's why it's important to ensure you have a competent and qualified person to draft your business contracts.

Keep these important tips in mind when it comes to business contracts

  1. Bad drafting causes interpretation problems.
  2. Poor language skills can lead to ambiguity and incorrect interpretation.
  3. 'It's very important that your drafter has sufficient knowledge of the law to construct a watertight contract that'll safeguard your business interests and express the true intention of the agreement,' says the Practical Tax Loose Leaf Service. Ask for a proven track record and evidence of experience in the field of drafting contracts. Don't let your attorney make his mistakes on you!
  4. Look out for and question complex, technical or archaic language. This can make the contract difficult to understand.
  5. Be alert for inconsistent use of language.
  6. Over-elaboration doesn't work. Your drafter can't make allowance for all possible eventualities and he shouldn't try to.
  7. Good drafting is a skill. A good drafter will be able to clearly express your intentions, purpose and corresponding rights and obligations in an economical and correct style. 'A common beginner's mistake is to make the error of repeating all the laws in the contract. The experienced draftsman knows, for example, that the Basic Conditions of Employment Act deals sufficiently with leave entitlement and that he doesn't need to repeat it all verbatim in the employment contract he's drafting for you,' says the Practical Tax Loose Leaf Service.

Keeping these points in mind when drafting business contracts will help ensure your business is properly protected.

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