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IMPORTANCE OF CONTRACT REVIEW BY LAWYER

2017-06-13 10:36:20
IMPORTANCE OF CONTRACT REVIEW BY LAWYER

THE LEGAL INTRICACIES             

·         ‘Offer’ and ‘Acceptance’: Though the words seem simple, there are specific rules in the Contract Act, to the effect that what you might regard as an acceptance, might actually not be binding, and the contract would not be enforceable due to technicalities. The law requires the offer and acceptance to be “mirror images’’, such that the exact matter offer must be what is accepted. If the exchanges imply that what was accepted was something else, then the contract will not stand before the law. A lawyer can identify such technical anomalies better.

·         Negotiation: If you are presented with a major contract to sign, and upon first reading it feels legit for you to sign right away, do not be hasty. Do halt and consult a lawyer, because there might be widely defined liabilities or open-ended terms that may be interpreted in more ways than meets the eye at first. An experienced lawyer can read between the lines and point out such terms, and you can negotiate with the other party to amend it before you sign.

·         Technicalities relating to Parties: The names of the parties must be stated in detail, including specific identification details; as vague terms cannot be established against a person in a Court of law. If you are unable to even prove that this indeed is the person you entered into the contract with, then the whole contract would go down the drain. For eg. If you simply add First Names and no other personal details to a contract of Sale, and the other party later refuses that he ever entered into such an agreement with you, you would not be able to prove that it was really him that was a party to your contract. A lawyer can help you draft contracts as flawlessly as possible.

·         Vague Terms: A lawyer can help you make sure that you have clarified the exact level of obligation that you intent to take, and none more. If liability is not clearly limited, then it may turn against you if the Court gives a wide interpretation. A lawyer’s drafting can help to ensure that all terms are clear, and only minimum room is left for interpretations.

·         Ensuring actual ‘Consent’: Consent of the other party is very essential to make the terms binding against him, and if that party claims that any term entered by you somehow was fraudulent or wrong, you may lose your right against him, if the Court rules that you made a misrepresentation or fraud. It is therefore very important to make sure that there are no mistakes, to the best of your knowledge, and only true facts are stated; do not include probabilities and speculations as if they are actual facts. Even your unintended misstatements may go against you. On the other hand, a lawyer could also help to ensure that you are not manipulated into accepting fraudulent offers.

·         Ensure Legality of Purpose: Not all agreements entered into between two people can be binding; there is the requirement for a lawful object, and some consideration (mutual benefit). Agreements in restraint of marriage/ lawful trade (exceptions are given in Contract Act), the sale of the property to defeat creditors, agreement to commit a crime, etc. are not valid; they are either void / voidable/ unenforceable, depending on nature. Legality is not as simple as it sounds, and a lawyer’s involvement will help you ensure that the object of the contract is not unlawful in any way.

·         Inclusion of Detailed Clauses: To prevent disputes, and to resolve them easily it at all they arise, you can incorporate a few terms in the contract itself. A lawyer can help you fix such details regarding limitation of liability, choice of jurisdiction, incorporation of an arbitration clause, choosing the governing law, mode of payment, etc. These minute details can help save a lot of time in disputes; for Eg, if jurisdiction is not stated in a contract which may fall in different geographical jurisdictions, then fixing the forum itself would consume time. This can be avoided if you choose a proper jurisdiction, in the contract.

·         Regulatory Compliances: There may be regulatory compliances that the parties are required to follow, to make the contract valid, depending on the nature of the contract as well. For eg, a contract of sale between two parties in different countries would need to look at the laws of both the countries. A lawyer can understand these better and avoid defaults.

·         Documentations: Certain contracts like a sale of immovable property (land, house, etc.) might require additional documents, to make the contract enforceable in law. For eg, in sale of land, the Title deeds are very important, and if any third party later disputes and proves a better title over a property you purchased through a negligently drafted contract, chances are that you will lose the land to that third party with better Title. A lawyer can help you ensure that all documents are in order.

·         Technicalities: There would be varying technical requirements, depending on the nature of the Contract, and only a lawyer could give you the right guidance to meet these aspects. Some technicalities include Limitation Periods, Warranties or Conditions stated in Contract, Automatic Renewal Clauses, inbuilt clauses for remedies, etc.

 

Since law is largely strewn with technicalities, and contracts are predominantly self-imposed obligations, it is always better to be entirely sure about what you are agreeing to, to avoid later complications. Last but not the least, professional assistance will help you get rid of a lot of extra efforts and stress, while ensuing better drafting as well.

 

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