Commericial Contract Drafting Skills
Almost all medium and large enterprises that require strict discipline value drafting and negotiating commercial contract skills. This is largely due to the importance of a proper contract in determining the success of the enterprise’s business and in maintaining said success. So what are the commercial contract drafting skill? Together with CNC, let’s find out the answer through this article
Wording in Contract
Contract represent the will of both parties to the contract, which would have bounding effect under the legal system. Therefore, extra attention should be paid into the wording and phrasing used in the contract
Wording in Contract must be accurate, specific, clear and telling. To exemplify and further demonstrate:
Accurate
One of the commercial contract drafting skills is to ensure the accuracy of the words and vocabularies used. Accuracy means that the words and vocabularies must correctly reflect the will of the parties to the contract
The contract drafter must have comprehensive knowledge on economics in order to construct a contract with specialized vocabulary, thereby avoiding clumsy and inefficent depictions as well as potential mistakes thereof
The usage of wording is especially emphasized when drafting contracts on negotiating the quality of goods and services
Specific
To be specific means using words or vocabularies that convey the contained meaning clearly, demonstrate each party’s goal, the content of the agreement between parties and the process to reach the agreement.
To be specific could also means to avoid the usage of vague vocabularies
Monosemous
When drafting commercial contract, it is the general consensus that monesemy should be used instead of polysemy so that parties could have the same interpretation. As this method increase the, this commercial contract drafting skill is indispensible to any contract drafter
Things to consider when drafting commercial contract
What should be considered in order to use phrases and words accurately, specifically and to avoid the usage of polysemy?
– Usage of commonly used contract vocabulary
– Avoid usage of local vocabulary
– Do not use unnecessary words, freely use abreviation (v.v…) or symbol (…)
– The phrasing must be clear and compact
– Usage of simple sentences instead of complex sentences or compound sentences
– Punctuation marks such as full stop (.) and comma (,) must be placed appropriately
– Language used in contract should be Vietnamese. Unless:
- It is a tecnology transfer contract agreed upon by both parties
- One of the parties to the construction contract is foreign entity, in this case the language used in contract are Vietnamese and English
Common mistakes in commerical contract drafting
In practice, contract drafters often make some of the following technical mistakes:
– Unclear and inconsistent wording, vague expression resulting in different interpretations
– Incorrect usage of vocabularies. To exemplify:
- Regarding deposit, in case that the depositor is to be blamed for the failure to perform the contract, the deposited property is given to the depositary. Vice versa, the depositary would have to pay a fine double or even triple (as stipulated in the contract) that of the deposit property value to the depositor
- Regarding advance payment, unless otherwise stated, the money is returned to the one who made the advance the payment if the contract is not performed
– Contract provisions inconsistent with the applicable law. This often originated from the frequent usage of pre-prepared contract form, as the contract forms are already prepared in advance and had already established its effectiveness over years of its usage, no changes are often made to these contract forms. This overreliance could result in two potential drawvbacks (1) The rusting of contract drafting skills and (2) the provisions of the contract form are no longer consistent with the applicable law.
Correctly reflect both parties’ wills and consistent with the law
Another commercial contract drafting skills is to make sure both parties’ wills are correctly reflected. The amount of information originate from requests set out by both parties is enormous and varied, therefore, the drafter’s role is to putting these information into certain provisions so that said provisions could convey the original request to the best of theirs capacity.
Since not all of client’s requests are protected under the law, after taking into account the requests of both parties, the drafter must cross-checking these requests with the current legal regulations and thereby choosing only those consistent with the law to put in the contract as provisions.
Another thing that drafters should be beware of is condition to give the contract full effect. For example, contract pertaining to real estate must be notarized.
The contract must not violate the law and should be notarized if required.
Potential risks
The last thing to be mindful of when drafting commercial contract is to foresee the potential risks arising from the contract. All parties to the contract would usually desire to reduce risks to the minimum, however, unaccounted risks arising from contracts are common occurrence.
Whether it is due to unauthorized entity, lack of legal capacity, or the amount, type of object of contract doesn’t meet the requirement set out in the contract or the delayed payment…. In the process of executing the contract, risks might arise due to various reasons.
In the process of drafting contract, the drafter should carefully research about the content of the contract in order to account for the various situations that may arise, thereby ensuring both parties’ benefits and interests.
Contract Information
If you want to find reliable and high-quality service pertaining to drafting contract, CNC is the correct decision. Wih extensive experience, we have the utmost confidence in delivering the best services to clients
Address: 28 Mai Chi Tho, An Phu Ward, Thu Duc City, Ho Chi Minh City, Vietnam
Phone Number: (84) 28-6276 9900
Hotline: (84) 916-545-618
Email: contact@cnccounsel.com
Website:
