Managing contracts requires numerous steps to ensure compliance throughout the contract lifecycle, including knowing which clauses are most critical. In addition to the scope of services, pricing and payment structure, and designated timeline (duration and renewal terms) indicated in a contract, the following critical clauses are also crucial to a successful outcome.
When managing contracts, confidentiality plays a key role. The confidentiality clause is a critical component to ensure vital information remains protected throughout and beyond the life of the contract. This restrictive clause can specifically cover intellectual property, client databases, and much more. The clause itself may be written in a broad manner to ensure the highest coverage and protection.
Dispute Resolution Clause
When a disagreement arises, the dispute resolution clause will be critical for swiftly reaching a viable remedy. This clause will lay out the process for settling disputes while the contract is in force and may include negotiation, mediation, arbitration, or a combination of these methods. A contract manager needs to know the process available when such a dispute arises.
In some instances, everything doesn’t go as planned, no matter how detailed a contract is and how it is worded. For this reason, the termination clause of a contract can define how a party can terminate a contract. Included in the clause should be a layout of which type of circumstances the parties may terminate the remaining duration of a signed contract. It should also include the provisions for notification of termination and any penalties or fees associated with termination.
Force Majeure Clause
Unexpected and unforeseen situations can occur, which will put the performance of a contract in jeopardy. To acknowledge this, a force majeure clause is often included in contracts. This clause identifies what the involved parties can do in particular circumstances that are considered beyond their control, and that will interfere with the ability to perform contract obligations. Parties will need to know if the clause allows for delay of performance or relieves the party in default of its obligations to perform.
For help managing your contracts, contact Baer Reed for additional information. We provide contract management, contract analysis, and more to law firms and in-house legal teams across the globe. Find out how we can help by calling 888-433-1990 or reaching out to us online today.
- On September 21, 2022
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