The first thing to do is to outline the agreement; including the most important provisions of the contract. This consists of what you expect from the deal, the due dates, quantities to be delivered, pricing issues and pre-conditions for the agreement. Once this is complete, you have to revise the list to include the wants of the other side. This way you will be able to frame the agreement to meet your terms.

A sound commercial agreement is one that has clear and ordinary words used throughout rather than legal jargon. This removes the chances of misunderstandings occurring from either side.

The first paragraph of the commercial agreement should recite and describe each party and the date of execution. Ensure that the signature lines at the end of the agreement well describe the parties involved in the agreement. There should also be space for the definition of important terms.

The subject matter or substance of the commercial agreement comes next in line where you must accurately address what is being sold; describe its price and payment time, delivery date and mode of delivery and the expected term of the agreement if this is to be a long term association. Never rely on unwritten promises; make sure everything related to the deal is on paper.

Next, include provisions that protect you if the other side does not meet its obligations or if you fail to meet yours. This should include appropriate warranties and representations, provisions for insurance and indemnification and in some cases, liquidated damages and cancellation clauses. And if the commercial agreement is for a defined term, there should be a termination clause where either party can terminate the agreement before the actual end date of the agreement.

Go through the agreement and if you find any unclear or ambiguous terms or technical terms, add its definitions at the start of the contract.

Ensure the contract is signed only by those who are authorised to do so.

Though you may cover all aspects of the commercial agreement while drafting, it is important to have it reviewed by an experienced solicitor.

Once the contract is signed, make sure that it is filed safely and is reviewed regularly.

DWT legal have a wealth of experience and can assist in drawing up, or assisting with your commercial agreement. If you would like to discusscommercial agreements with us, please call 01562 514862, email This e-mail address is being protected from spambots. You need JavaScript enabled to view it or contact us using the contacts page of our website.

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