“I just want to get this contract over the line!”
The elation of winning a pitch or bagging that customer you’ve been after for ages is swiftly forgotten as soon as you receive an email with either the customer’s terms, or the customer requesting a contract from you (and you haven’t got one – gah!). The most infuriating thing of all is when the customer has re-written the brand-new set of terms you have sent them.
Getting the contract over the line is a common client request and reflects the understandable business focused goal of getting the contract signed asap, so that the work can start.
However, if it were simply a case of signing the contract, the business could of course just sign it. But the fact that legal input has been requested means there is another factor to consider: the client also wants legal protection!
So, the real issue is finding the balance between getting the contract signed asap and protecting the client. At the centre of finding this balance is understanding RISK. There are many definitions of risk which vary according to the industry, but ultimately it is about allowing for the possibility that during the life of the contract, something might happen which could adversely affect the contract which could lead to harm or loss to either of the parties. The purpose of a contract is to allocate or mitigate these risks.
There are two sides to risk. One is what is the impact of a future event on the business and two, how likely is it that the future event will occur. Part of the impact of an event will be if the business can live with it, or not at all, or can it be mitigated either operationally or in the contract. The assessment of the impact of an event on a start-up which is about to bag its first major client will be very different to a plc which has a much more formal accountability structure. This does not mean the start-up is being frivolous, it’s properly weighing up the pros and cons of the deal in the context of the business, its growth journey and the stakeholders in the business and the contract. Indeed, we frequently support many clients in taking a stand on key legal and commercial issues against a larger client. It’s all about context!
The best (and quickest) contracts are written by a meeting of commercial and legal minds to properly assess and understand real risks facing the client in the context of the bespoke circumstances of the client.
This meeting of commercial and legal minds can be a very powerful tool to get the contract over the line, which along with a pragmatic approach to legal drafting (another blog for another day) means getting that contract signed off asap whilst protecting the client at the same time.
For further information, contact Tracey on 01202 729444 or e-mail tracey@law-point.co.uk.
