Sunday, November 11, 2007

Avoiding contract woes - defining the need

Photo: Gordon Smith, Apsley Lower Falls, near Walcha, New England Tablelands, Eastern Australia

Great gorges cut their way through the eastern edge of Australia's New England Tablelands. Peaceful countryside suddenly gives way to jagged cliffs.

This is very like contracts. Conceived in peaceful country, disputes suddenly move the parties over the edge of the cliff into the rugged gorges below.

It may sound dumb, but in our experience the biggest problem with contracts comes from failure to define the purpose the contract is to meet.

Too often in the desire to complete the deal, parties rush to complete the contract. Far too often, also, contractual matters are left to lawyers.

A contract is first and foremost the legal wrapping that goes around a business deal. If you haven't defined the deal properly, then the legal wrapping will be imperfect.

As professionals, the core role of lawyers is to provide advice on legal issues. They cannot be expected to compensate for your failure to define what you want or are prepared to offer. The clearer your advice to them, the better they will be able advise you and at a lower cost.

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