Contracts: the importance of customized Terms
How to adequately manage your business risks
Naturally, mistakes must be avoided during the contract drafting process. For lawyers, it is considered an omission when the contract does not accurately reflect the intentions of the parties.
When managing your risks in shaping the contractual relationship, you should ask yourself the question: how are things taken care of if something unintentionally goes wrong and how can my liability risks be reduced? But beware: often times it’s risky to adopt standard terms and conditions. These definitely do not take your future needs into account
My clients bring these concerns to me on a daily basis. Old practices with regards to contracts are not always sufficient. Nowadays, people can easily startup a business or diversify their (online) activities and the partners they do business with. This involves all kinds of new risks, and raises the question, “are my contracts and terms from the past adapted to this new situation?”
You must not only consider waivers of liability. But also: reps and warranties, circumstances beyond your control, penalty and indemnification clauses. An expert lawyer should also look carefully into the market position of the contracting parties, and the nature of their relationship. These all are contractual matters.
A lot of people choose a set of general terms and conditions, instead of having customized contracts drafted each time. The importance of worthy and adequate terms and conditions cannot be denied, but are in actual practice often underestimated.
In an international situation, an important question is whether terms and conditions apply at all. In particular when drafted based on standard guidelines. Basically, everything changes when a foreign country comes into play. This raises a number of questions. The law of which country applies, where to litigate in case of future conflicts? And what about breach of contract, liability and compensation? An expert lawyer could also advice you on business risks in general, and the contract's consequences to your business, rather than putting up legal hurdles.
