Essentially, a legally sound contract should be drafted and negotiated on the basis of a fundamental understanding of the relevant business, including its business concept, products, strategy and risk taking. We take pride in knowing and understanding each client’s business, recognising that only with such detailed attention is it possible to draft contracts which match the requirements of the business.
Potential investors, financial institutions and professional boards of directors today demand that the risk exposure of a business is properly managed, and contractual arrangements are pivotal in this regard.
We have extensive experience in forming an overview of the needs of a business and in drafting policies underpinning the preparation of its contracts.
Close attention must be given to the importance of discussing the legal implications at the outset of any negotiation process. Unfortunately, however, it is not unusual that the parties rely on “sorting out the legal nitty-gritty at the end”; and regrettably it may then transpire that the parties are too far apart in their expectations of who should bear a given risk. Or, because so much has been invested in the negotiations and/or development of the project, it may be that one of the parties assumes a risk disproportionate to what the specific business can carry.
It has become a matter of principle, particularly in large organisations, to insist on back-to-back agreements. This means, for example, that if the market in which the business operates demands a five-year unlimited performance guarantee, then the subcontractors of the business must offer a similar guarantee. Whilst this naturally may make perfect sense from the point of view of the main contracting business, it may in many instances not be sensible for the subcontractor. If a supplier sells a product of very modest value (a nail, say) to a business which incorporates the product in a very expensive end product (a wind turbine, say), it is not reasonable to expect that the supplier assumes unlimited responsibility if a defect in the modest product causes malfunction in the expensive product. It will be necessary to find a mutually satisfactory solution to such opposing positions as anything else may have grave consequences.
We offer advice on, for example,