The Corporate Law Group

How to Draft

We see a lot of “legal-over-business” in our practice.  And that is exactly the opposite of how to do things.  Contracts are recitations of business expectation.  They are not the important thing.  The business is the important thing. 

When you write anything legal; draft a contract; write a prospectus or franchise disclosure; draft an annual report; and if it’s not already crystal clear what you are doing, you will waste a bunch of money drafting things that don’t hit the target. 

The contract is a sometimes a necessary evil.  You want to make sure the other side knows what you think is going to happen and agrees with that.  That you are both on the same page.  You don’t want to go into some venture or deal and find out later that the other side had a different expectation.

If all expectations are clear and everyone is honest, handshakes work just fine. 

We find that a lot of people focus on the contract or legal document, not on the business.  They think they need some sort of agreement so they start drafting.  Trust us, if your lawyer has experience with the deal you are doing, they don’t need drafting help.  (And if they don’t have the experience, you are working with the wrong lawyers).  We’re not sure who said it first, but you want your professional team to be completely bored by the work they are doing for you; in other words, not learning something new working on your deal.

So, start with the critical business terms.  What’s going on?  How much?  When?  Limitations?  Who does what?  How many?  Etc.

Then get more granular.  Warranties?  Indemnification?  What’s a breach?  Remedies?  What about de minimus stuff?  Litigate where?  Arbitration or mediation?  Fees for the winner? 

Then draft. 

No one should start by saying, “Let’s draft a contract.”  Want to hit the target every time?  Draft efficiently?  Start with the big stuff, the business terms and when those are clear and agreed, then draft.  Save money.