7+1 tips for secure contracting
What to look for when signing a contract?
When signing a contract, it is essential that all parties are aware their tasks, rights and responsibilities. In order to ensure this, all of these must be included in the agreement. Based on the US based Cincinatti Insurance Companies‘ article, we have created this list, which may help you when signing your next contract.
Here are 7+1 things to look for when reviewing a contract
1) Negotiate the terms
When presented with a contract, remember that this is a starting point. You can negotiate the terms of nearly every agreement. Understand the purpose and scope of the contract and ask for what you want. You want to make the deal happen, but so does the other person. The worst that can happen is they say “no.”
2) Identify the parties
Be sure to include the names and addresses of any subsidiaries that will provide services.
3) Rights and responsibilities
It’s important to capture who’s responsible for what and who is liable if something doesn’t happen according to the contract. Never rely on an oral understanding. Know all of your rights and responsibilities under the contract. Carefully read the entire contract because rights and responsibilities are typically scattered throughout the agreement.
4) Confidentiality provisions
Determine if the other party will have access to any of your company’s nonpublic or protected information and, if so, consider including a provision requiring them to handle and secure the information in a commercially reasonable manner consistent with applicable national laws.
5) Remedies provisions
No one wants to talk about the bad stuff, such as what happens if something goes wrong, but you need to consider these things to put necessary mechanisms in place. Explore ways to limit your liability. Also determine what types of remedies you need in the event of default by the other party.
6) Causes for termination
Consider including ways to terminate the contract for cause and/or for convenience (without cause) if it is not working to your benefit.
7) Resolution of disputes
Determine how you want to deal with resolution of disputes. An arbitration or mediation requirement could ultimately save you lots of time and money. However, there are times when you may need to go to court to resolve the dispute. When appropriate, try to give yourself some flexibility.
+1) Fraud prevention
Business is usualy based on trust and good faith, where parties of equal standing create mutually beneficial arrangements. Unfortunately, there will always be those who take advantage of this trust to try to gain unfair advantage or make a quick buck. This can be the case if, after negotiating the contract, one party amends the text of the document without the other’s knowledge, or if the contract is not signed by an authorized person, thus invalidating the agreement.
We cannot help you in negotiating your contracts, but we can help in providing you security. On the TrustChain Platform you will always know who you are signing a contract with and whether the person signing the document is authorized to do so or not. In addition, our Simple Contract service automatically logs all changes in the text of the contract, thus protecting you from any unseen amendments.