Contract review & negotiation

⚡tl;dr always carefully review an agreement and seek help if you do not fully understand it check out at least the imposed obligations, the liability, the termination notices, and the warranties given by both parties do not be afraid to redline a contract coming from a counterparty, even if it's a big potential client book a free call with us what is it? reviewing a contract is the act of checking a contract that was not drafted by yourself or your lawyers and determining whether it can be accepted as such or if some amendments must be suggested you should always carefully review an agreement before signing it, and seek help if you're not 100% confident in understanding its content what to look out for? variable content type of contract qualifying a contract means putting it in a category corresponding to the law it is relevant to know which mandatory rules apply key obligations a contract lists the obligations of the parties be aware that it might be done expressly (e g , in a section called "seller's obligations") or in various parts of the contracts (e g , by using the verb "shall", such as the seller shall provide the car) liability is it limited? if yes, for which parties? and to what extent? keep in mind that under swiss law, liability cannot be entirely limited (see limitation of liability docid\ mvpfhtm8 koc2 snfwneq ) indemnity indemnity clauses create an obligation for the indemnifying party to pay the other parties' costs if some conditions are fulfilled this is often the case if the representations and warranties are violated for example, if a software developer warrants that the ip won't violate third parties' ip rights, and a third party sues the client of the software developer, the software developer might have to pay the client's attorney costs to fight back non compete a non compete clause prevents one or both parties from working with the other company's competitors for example, that might be the case for a company entering into a software development agreement that wants to avoid the same software development company working with its competitors key elements to look for are the scope and the duration of the non compete non solicitation a non solicitation clause prevents one party from working with the other party's clients for example, a company that has a service agreement with a service provider to deliver some advisory services to their clients wants to avoid that the service provider can "steal" the clients and provide services directly to them key elements to look for are the scope and the duration of the non solicitation term the term is the duration of the contract check whether there's a fixed term (either in duration in months/year or related to reaching the end of the project) or if it is open ended termination in relation to the term, the termination clause states whether the parties can terminate before the term, and if yes, with which notice a common clause is for the parties to be able to terminate for convenience with a given notice and at any time immediately for cause the definition of a termination for cause is rather vague and depends on the type of contracts and the circumstances we advise to discuss with your lawyer whether you can terminate, feel free to book a free call to discuss representations & warranties representations are "true statements" at a given point in time for example, the seller might represent that they are authorized to sell the object warranties are future facing for example, a software licensor might warrant that the software does and will not violate third party ip rights review representations and warranties carefully, there's often an indemnity clause linked to the violation of the representations and warranties amendments some contracts add a unilateral right for a party to amend some elements of the contracts this is often the case in terms and conditions and might even affect the pricing check that and ideally negotiate that amendments require the agreement of both parties applicable law the applicable law & jurisdiction docid\ qrvc47mbuqi2orfhcobgk plays a role in the interpretation of the agreement in the event of a dispute best practices limits the person in charge of the negotiation must be aware of what can and cannot be accepted from a product and business perspective (e g , extent of liability, sla, discounts, etc ) defined terms the definitions must be carefully reviewed how do i negotiate the contract? depending on your review, you might have to suggest significant changes; this will lead to a contract negotiation the standard timeline of a contract negotiation is the following when negotiating with corporate figure out what negotiation power the other party has ​ decide how much time do you want to spend on negotiations know the red lines of the counterparty​ and what they will not accept do not be afraid to set your own red lines, esp on ​ wrong service descriptions (often, the other party uses standard templates, which leads to wrong services description)​ intellectual property​ liability, warranty, penalty​ sla how do i get this done? check out our contract review package and book a free call with us best practices checklists to ensure efficient contract review and negotiation, an internal process (e g , checklist for each type of contract) is in place, and/or a legal partner is hired for the tasks