Commercial contracts form the foundation of a business relationship and frame the parties' rights and obligations. A well-drafted contract prevents a significant portion of potential disputes from the outset.
Five points to watch
1. Correct identification of the parties: The trade name, registry number and authorised representatives of each party must be clearly stated.
2. Clarity of obligations and deadlines: The parties' duties, delivery/performance periods and payment terms should leave no room for doubt.
3. Penalty clauses and damages: Provisions on liquidated damages must be balanced and enforceable.
4. Dispute resolution: The competent court or arbitration and the governing law should always be agreed.
5. Termination and force majeure: How and when the contract ends, together with force majeure provisions, must be set out clearly.
