Some hints to consider any time we are drafting an agreement

related to specific issues

THE EFFECTIVE DATE OF THE AGREEMENT

It is normal for the last party to execute (sign) the agreement to enter the date on the first page of the contract. Though caution should be exercised that the Effective Date as defined in the contract does not override the date the contract is signed. That is, it is possible for work to have commenced before signing. This is not ideal as the terms and conditions of the contract may not have been settled until the signatures of the parties are entered. Seek legal advice if you are unsure.

DEFINITIONS

Always check that the main terms in the Agreement are defined in the Definition section. This is important to assist you or anyone else in interpreting the Agreement correctly.

TERM OF THE AGREEMENT

This states when the Agreement starts and when it is completed. A common example fitting on co-operation agreement of such a clause is: “The commencement of this Agreement will be on the date of final execution by the last party to this Agreement and will continue until the final date of the project unless the project is otherwise terminated.” The information may also be found in a Schedule to the contract. (‘final execution’- means the last Party to sign the Agreement

INDEMNITY

An indemnity is usually a statement of responsibility for any act of negligence or other event that may cause damage to the other party to the Contract. It is suggested that these clauses have both of the following two points if possible.

Responsibility – That the party having the risk indemnifies the other party for any of the events expressed in the clause (though the other party may not accept this responsibility).

Reduced Proportionally – This means that any negligent event or other event that may cause damage is reduced to the level of the damage caused by the other party not giving the indemnity.

LIABILITY FOR LOSS OR DAMAGE

Contracts should specify which party is to bear the liability for loss or damage arising out of work performed pursuant to an agreement. This should be done regardless of whether the parties are insured for public liability, professional indemnity or any other class of insurance.

DISPUTE RESOLUTION

All Contracts should have a Dispute Resolution Clause that will have the disputants undertaking the following methods for dispute resolution: This process is followed if the previous method was unsuccessful: internal mediation – from both Parties internal structure; external mediation – a neutral mediator will undertake the mediation between the disputant parties to the Agreement; conciliation;  arbitration;  ultimately litigation- going to court will only be used as the last resort.

TERMINATION

Should an agreement be terminated it is important that the agreement recognises that any unspent funds may be committed for some period after the termination, particularly funds earmarked for salaries. All Contracts should acknowledge that staff employed by the University pursuant to the Agreement must be employed in accordance with the University’s conditions of Appointment.

related to generic issues

At last, there are some basic question to ask to ourselves as we are reviewing a contract/agreement? Of course, there are plenty.

• 1. Does it contain all elements of a legal document?
• 2. Do we understand it and can it be explained to the signing authority if any? Or, do we have the authority to sign it?
• 3. Does the language and scope of the document reflect what was negotiated/agreed?
• 4. What are the obligations on our company/ourselves? Can our company/ourselves meet the
• obligations?

Other issues to consider?

• 5. Is the contract a consistent and clear one?
• 6. Does the contract plan for future disagreements eg. Dispute/consultations?
• 7. Can our company/ourselves terminate it? Under which conditions?
• 8. Which is the applicable law? Is the Jurisdiction Local or Overseas?