One rare occasions, I’ve provided an initial “lawyer’s eye” review of small business documents. This has occurred simply because I have a general idea of the sorts of things lawyers will nitpick. That said, whenever I’ve reviewed business agreements, employment contracts, terms and conditions, or other documents that stray into the field of law, I am firm in my request that the customer talk to an actual lawyer, especially if I have questions and don’t know the answer to them. Today’s post will provide some additional insight if you find yourself in a similar position.
What Contracts Do
When you are putting together a business or partnering agreement with an outside consultant or another company, you are laying out what amounts to a contract. We think we know what contracts are and how they work until we have to write them ourselves. This is usually when we realize how lawyers make their money: the devil is in the details. A typical contract performs the following:
- States what good(s) or service(s) each party to the contract will provide to the other and what or whether compensation is involved. The contract will also state the method/format of delivery; the location(s) where the work will be performed; the required delivery date; and the required delivery location.
- Describes what action(s) constitute a violation of the terms of the contract.
- States what the consequences are if either party violates the contract or fails to provide the agreed-upon good(s) or service(s).
- States who is responsible for doing what.
- Describes the process for making changes to the contract.
- Describes how disputes about the terms of the contract will be settled and by whom.
- States when and for how long the contract will be in effect.
- Goes into effect when the appropriate authorized individuals on both sides of the contract sign and (usually) notarize the document in the presence of witnesses, who also sign.
How Do You Approach Writing a Contract?
The goal is not to put everyone on the defensive, though sometimes the process of writing such a contract or agreement can feel that way. What you’re doing when you set up a business agreement or contract is establishing the “rules of the road” for how each side of the contract will behave. You’re ensuring that each side is receiving some sort of value and setting behavioral expectations, not necessarily management practices, though some of them can get that prescriptive.
As a technical writer, this is your opportunity to write as clearly as possible. If this is a new activity and not a boilerplate document, an actual lawyer should (I’d argue MUST) review the document before both sides sign the agreement. However, in the beginning, you might confer with your leader and a leader from the other side–the contractor or company president–to get a clear idea of what their expectations are. Then you start writing.
You put on your “lawyer hat” when you start digging into the details. Usually the details that will trip you up involve boundaries or limits on deliverables:
- What is/are the purpose(s) and goal(s) of the agreement?
- What specific tasks are “in scope” and “out of scope?”
- Is it important to specify where the work will or cannot be done? Are there ITAR, other regulatory limitations, or safety concerns that restrict where the work can be done or by whom?
- What precautions, if any, do the parties need to take to protect the legal, financial, physical or intellectual property, or safety interests of the other(s)?
- Is it possible that additional/outside companies’ expertise, intellectual property, or personnel need to be included in the work? What limitations need to be placed on that activity? Will outside personnel need specific security clearances or need to sign non-disclosure agreements (NDAs) to work on the project?
- Are there activities one party or the other will perform that will require them to comply with specific laws or regulations? You might not know the specific chapter and verse from the United States Code (USC), but you can at least include a note to the lawyer(s) to reference that section or sections in the final contract.
- If any new products or intellectual property result from the agreement, who will own and benefit from their exploitation?
- If there is potential profit on both sides of the agreement, what will the split be?
- If you’re forming a new organization–permanent or temporary–who has the final authority if there’s a policy difference?
In short, you’re looking for potential points of conflict, from gains and profits to penalties and punishments. You’re looking for situations where one party’s rights might infringe upon or exceed the other’s. You’re also looking for situations where the activity conducted under the contract might be subject to some obvious existing laws. Ideally, you want to create an equitable arrangement that is agreeable to both parties without one side feeling coerced (though there are circumstances where that occurs, too, as in the case of a hostile takeover).
Again, you are not a lawyer unless you’ve got Juris Doctor (J.D.) levels of education and experience. That said, in the freewheeling world of a small business, you might find yourself writing the basic principles of an agreement or contract that is, eventually, legally binding. Something new and exciting to look forward to in the future!