5 Common Contract Mistakes To Avoid

When drafting an important contract, it is easy to make mistakes. Business contracts can often be long and contain unfamiliar terminology. Attention to detail and a depth of understanding about what the parties to the contract are trying to accomplish are essential. A misplaced word, letter, or even punctuation mark can make a big difference.

The contract is the foundation of any working relationship. It spells out exactly what each party expects from the other, how and when they expect it to be accomplished, and what they each will receive in return. Particularly in high stakes industries like healthcare and technology, relationships with strategic partners can be everything. Business sometimes takes unexpected twists and turns – you want to be sure you have a properly drafted contract in place to protect you and your enterprise.

If your working relationship is not clarified at the beginning of the process, it is a ticking time bomb. Here are 5 common contract mistakes that you should avoid making:

Leaving It Unsaid

One of the worst mistakes that you can make in a contract is assuming that something is understood. Anything that you have agreed to but not addressed in a contract is probably not legally enforceable. A good habit to adopt is to ask yourself “Would this be clear if it was read by an arbitrator or judge who has no familiarity with the parties or the relationship?” If the answer is no, don’t leave it unsaid – add objective clarifying language.

Using Vague Language

Our team has spent countless hours fixing contracts that were downloaded or copied and pasted from the Internet. Besides the fact you typically get what you pay for when it comes to contract drafting, there is almost zero chance that the document or language you found will apply to your unique situation. Your contract should be created to specifically cover your own business. Using vague or ambiguous language can result in serious consequences, since it will not make sense if there is ever a need to enforce it. “Boilerplate clauses” have their place, but they aren’t all created equally and only benefit you if they have been chosen by someone who understands exactly what they mean and when/where they belong in a contract..

Not Negotiating It

Preparing a contract is not step one of a business transaction. Before a deal is memorialized in a contract, the parties must first negotiate the key terms. The next step is capturing the details and tying up any loose ends. Only then are you ready to choose the right contract structure for your deal.
For business relationships, the first contract you receive is often understood as an initial draft. If there is something you are unhappy with, negotiate it before you sign the contract! Make sure any additional changes are captured in writing in future drafts.

Ignoring an Endgame

At the start of a business deal, usually everyone loves everyone. Sadly, even the best working relationships sometimes reach a difficult end. Make sure your contract has clear plans for what the end goal of the relationship is, and what the exit paths are along the way. You should also include clear instructions on how to end the relationship prior to hitting your goal if need be.

Not Doing Scheduled Reviews

Once your contract has been signed, it is tempting to file it away and never look at it again.  Sometimes that works out OK. More often, however, the relationship with the other party to the contract takes unexpected twists and turns. Frequently the best negotiated terms that made perfect sense when you signed the contract aren’t fair or even applicable anymore a year or twi into the contract’s term. Schedule a contract review on your calendar (usually annual reviews are fine) just to sit down and make sure the provisions in your contract still reflect the real-life agreement between the parties.

Get the Help You Need

At CLARK.LAW, we know contracts. We’d even go so far as to say we love them! For more information, contact CLARK.LAW here.

The following two tabs change content below.


At CLARK.LAW, we’ve built a different type of law firm. Our attorneys and staff have impressive educational and professional experience – but, unlike traditional law firms, we embrace modern technology to create efficient workflows and processes. Today’s business leaders should have access to high-quality legal guidance without subjecting themselves to the waste and excessive overhead that plagues traditional law firms.

Latest posts by CLARK.LAW (see all)