A contract is tested only when something goes wrong, which is precisely when a badly drafted one becomes expensive. Most disputes trace back to a gap or ambiguity that could have been closed at drafting stage.
What the Contract Act requires
The Contract Act 1872 sets out the basic requirements for a valid contract — offer, acceptance, consideration, capacity and lawful object. Beyond that floor, the content of a commercial agreement is left to the parties, which is both the opportunity and the risk.
Clauses that are most often missing
- A clear description of the scope of work or goods, not a vague reference to a prior conversation
- Payment terms with consequences for late payment stated explicitly
- A termination clause covering both convenience and breach
- Governing law and the forum or arbitration clause for disputes
- Confidentiality and, where relevant, non-compete provisions appropriately scoped
Standard form and negotiated terms
Where one party uses a standard form, the other should read it as if it will be relied on adversarially, because it will be if the relationship sours. Negotiating the risk allocation clauses matters more than negotiating the price.
What to do next
Bring the draft agreement, or a description of the deal if none exists yet, and a clear account of what each side is actually promising to do.