INTRODUCTION
Contract Drafting plays a significant role in every document. A well-drafted document can save you from litigation and disputes. The reason behind saying so is that a well-drafted document is always free from ambiguity and has no loopholes, which avoid lending you in trouble at a later stage. This article will guide through the tips for Drafting Contracts. Thus, instead of directly moving towards the tips of Drafting, lets first understand the meaning and nature of Contract. For a better understanding of the reader this article is drafted in Questions and Answers format.
What is Contract?
A contract is a legally binding agreement between the parties. In other words, a contract is the outcome of the meeting of minds between more than one party. This subject is regulated by the Federal Law No. (5) of 1985 on the Civil Transaction Law of the United Arab Emirates, and Article 125 of the said law defines the meaning of Contract, which is mentioned herein below:
“A contract is the meeting of an offer issued by one of the contracting parties with the acceptance made by the other party and their concordance in such a manner as to produce their effect on the object of the Contract and results in a binding obligation on each party in consideration of the obligation of the other party. A meeting of more than two minds may agree to produce a legal effect.”
What can be the Object of Contract?
Commercial Contract Drafting lawyer states that the object of Contract is significant because if the object of Contract is not in terms of law or is illicit in nature, then the said Contract cannot be termed as legal and binding between the parties and would be considered null and void in the eyes of law. Article 126 and 127 of the Civil Transaction Law of the United Arab Emirates deals with this question, and for better understanding the relevant extract of the said is mentioned herein below:
Article 126
“The object of a contract may consist of:
- a) Property, movable or immovable, corporeal or incorporeal;
- b) Usufruct of the property;
- c) A specific act or service;
- d) Any other thing that is not prohibited by law or violating public policy or morals.”
Article 127
“An offense or violation may not constitute the object of a contract.”
Therefore, it is very important to know or decide the object of Contract before executing it. If it is not as per the law, then the said Contract will not be considered as legally valid and may be termed as void or invalid.
What are the essential elements of Contract?
Commercial Contract Drafting lawyer states that some essential elements are required to be included in the Contract to make it binding upon all the parties. The said essentials which are needed to be included in the Contract are mentioned under Article 129 of the UAE Civil Transaction Law. The relevant extract from the said provision is discussed below:
Article 129
“The necessary elements for the formation of a contract are:
- a) Meeting of mindsof the contracting parties on the main elements;
- b) The object of the Contractmust be something possible, specified or specifiable, and negotiable;
- c) The obligations arising out of the Contract must have a licit cause.”
If the Contract is possessed with the above-mentioned elements into, then the said Contract is valid and binding between the parties and will have force in the eyes of law.
GUIDE TO Contract Drafting
After discussing basics of Contract now let’s move to the second part of this article which is in relation to the Drafting of Contract. In this part details that a normal contract shall possess are mentioned in a chronological manner which will guide the reader to the art of Drafting.
Our Commercial Contract Lawyer tells you about the tips of drafting contracts.
TIPS FOR Contract Drafting
- DETAILS OF THE CONTRACTING PARTIES
The Contract shall include the details of the contracting parties into it. If the said Contract consists of any of the party residents of UAE, then the components with Emirates ID and passport shall be mentioned. Moreover, the contact details with the email address of the contracting parties must also be mentioned.
- PURPOSE OF THE CONTRACT
In the next part, after filling in the details of the Contracting parties, the Contract shall mention the purpose clause, which will clarify the understanding and purpose of the Contract.
- TERMS OF THE CONTRACT
After defining purpose of the Contract then, terms regulating relationship between the parties shall be mentioned, which will provide an understanding about relationship which has been formed between the parties.
- CONSIDERATION
Consideration of the Contract is considered one of the essential elements, as a contract without consideration cannot be enforceable in the eyes of the law. Most importantly, consideration does\’t need to mean always being in terms of money.
- RIGHTS AND OBLIGATIONS
After mentioning the consideration in the Contract, rights and obligations assigned to both parties shall be mentioned, which must be balanced and shall not be ambiguous.
- PAYMENT TERMS
Specific clauses regarding the payment terms or mode of payment (if any) shall be mentioned in the Contract with specific zing details of the receiving party. This will not lead to any difference between the parties in the future.
- TERMINATION
This clause is very important to any Contract Drafting which will define the procedure and terms of termination and its consequences after termination. This clause generally includes the termination procedure after serving notice in a particular time frame as agreed between parties. Moreover, this clause shall also include the consequences if the Contract is terminated due to the violation committed by any contracting parties.
- CONFIDENTIALITY AND NON-DISCLOSURE
This clause is also very relevant and is used to protect the confidentiality and privacy of the information and data exchanged between the contracting parties. The importance of this clause is that extent if there any breach or violation is committed by any of the contracting parties, then the said Contract can be terminated.
- INDEMNIFICATION CLAUSE
This clause imposes liability upon the contracting parties so that they can indemnify each other if any loss or damage is occurred by their act or by the act of any third party.
- SEVERABILITY CLAUSE
This clause makes the Contract valid even if any of the conditions mentioned under the Contract become void or nullified. The function of this clause is to separate the invalid party of the Contract from the rest of the valid remaining Contract. In other words, this clause helps in keeping the Contract alive.
- UNDERSTANDING CLAUSE
This clause makes the Contract a clear, better, and final understanding between the parties and supersedes any or all other previous understanding before the execution of the contracts.
- GOVERNING LAW OR JURISDICTION CLAUSE
This clause specifies the law regulating a particular contact, and the parties to the Contract can raise their dispute or claim with or before the authorities as applicable by the law chosen by the parties.
Our Commercial Contract Lawyer has wide experience and expertise in Drafting of Contracts and Agreements.
OUR SERVICES
We provided best services in terms of drafting contracts and agreements mentioned below:
- Construction Contract
- Debt Collection Agreement
- Employment Contracts
- Franchise Agreements
- Joint Venture Agreements
- Master Service Agreement
- Mediation Confidentiality Agreement
- Non-Compete Agreement
- Non-Disclosure Agreement
- Partnership Agreement
- Pre-Contract Agreement
- Reviewing Contract and Agreement
- Shareholders Agreements
WHY US?
NA Lawyers Attorneys Law Firm is known for its expertise in legal document drafting services. Our team of highly qualified commercial contract lawyers are well experienced and possess qualities and skills of Drafting and legal contract review.
Legal Document Drafting service is essential so that future issues or disputes arising out of the loopholes or lacuna available in legal documents may be avoided at an earlier stage by using the expertise which our lawyer possesses.
Our law firm is known for its legal contract review and drafting services which our lawyers and legal consultants provide to the clients. Thus, to avail services of the legal document drafting service or legal contract review, contact us.
