As a young freelance or an entrepreneur closing a business deal, it may be tempting to sign a contract as soon as possible, despite the fact that you know well that you may not be in complete agreement on its terms.
Rather than spending the time necessary to precisely agree on each term of the contract, both parties tend to just settle on vague descriptions of each party’s rights and obligations in the contract. If the parties rely on a template, the parties may even knowingly agree to contractual provisions that may be unsuited to their scenario or even may be unenforceable under the law.
Anyone looking to seal a business deal should take the time to understand and figure out exactly all terms before entering into a contract.
As a startup lawyer, so many startup founders I’ve worked with seek to avoid taking the time needed to define critical terms in the contract. Instead, they prefer to include wordings such as how they will “mutually agree upon” the term in the future with the counterparty.
For example, referring in the contract to “reasonable expenses”, or relying on what you may perceive to be “standard” terms that in reality are not uniformly defined across the industry. In the case of a dispute, the disputing party will end up at a losing end if the other party refuses to agree on the suggested interpretation.
For example, as a freelance worker, when addressing payment terms, it is helpful to address the required time, specific payment milestones to be achieved, and method for payment and any remedies for late payments (such as imposing interest or penalty).
Rather than agree on a specific time period for when a task needs to get done, contracts that vaguely specify that the task must be performed in a “timely manner”, “as soon as practical” or “as soon as possible”. It is a better practice to specify the actual date or the number of days by which each party must perform or complete a task.