Deal Negotiating
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What to Look For: Ensure the contract clearly identifies all parties involved, including their full legal names and any relevant business entities.
Why It Matters: This confirms who is entering into the agreement and who is responsible for fulfilling the terms. Make sure your name or your company’s name is accurate.
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Scope of Work (Services/Deliverables)
What to Look For: This section should clearly outline the work to be performed, services to be provided, or products to be delivered.
Why It Matters: To avoid disputes, make sure the scope of work is specific, including any deadlines, milestones, and expectations. Vague or unclear descriptions can lead to misunderstandings.
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3. Payment Terms
What to Look For: Ensure the contract specifies:
Total amount to be paid
Payment schedule (e.g., upfront, upon completion, or in installments)
Method of payment (e.g., wire transfer, check)
Any late payment penalties or interest
Why It Matters: This guarantees you know when and how you will be compensated. It also helps avoid delays or non-payment by the other party.
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4. Deadlines and Timelines
What to Look For: Any deadlines for deliverables, completion dates, and project timelines.
Why It Matters: These deadlines ensure both parties are on the same page regarding when work or services should be completed. Include milestones if the project will be ongoing.
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5. Termination Clause
What to Look For: Clauses explaining under what conditions the contract can be terminated, who can terminate it, and what happens after termination.
Why It Matters: To protect yourself from being stuck in an undesirable agreement. Make sure the terms of ending the contract (for either party) are clear, such as notice periods or reasons for termination (e.g., breach of contract).
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What to Look For: A clause that outlines how proprietary information will be protected and any obligations you have to keep certain information confidential.
Why It Matters: If sensitive or proprietary information is involved, this protects your ideas, business plans, or trade secrets from being shared with others.
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What to Look For: A clause that specifies who will be responsible for any legal or financial liability if something goes wrong (e.g., intellectual property disputes, lawsuits).
Why It Matters: Indemnification protects one party from being liable for the other party’s mistakes or negligence. Look for clauses that clearly state who will cover damages, legal fees, or claims.
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Warranties and Representations
What to Look For: Any promises or guarantees made by either party regarding the quality of work, materials used, or services provided.
Why It Matters: Warranties protect you if the other party fails to deliver as promised. Representations ensure each party is being truthful in their claims.
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What to Look For: Clauses outlining who owns the intellectual property created or used during the contract (e.g., copyrights, trademarks, patents).
Why It Matters: If you are creating content, products, or anything of value, this clause determines who owns the final product or work. Make sure you retain rights to your IP unless otherwise agreed.
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What to Look For: Clauses that explain how disputes will be handled (e.g., mediation, arbitration, or litigation).
Why It Matters: Dispute resolution clauses outline how conflicts will be resolved without resorting to costly litigation. Arbitration and mediation are common, less expensive alternatives to court.
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Force Majeure (Act of God)
What to Look For: A clause that excuses performance of obligations if unforeseen circumstances (e.g., natural disasters, pandemics) occur.
Why It Matters: This protects both parties from liability in case events beyond their control prevent them from fulfilling their contractual obligations.
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Amendment/Modification Clause
What to Look For: Terms that outline how the contract can be changed or modified after it is signed.
Why It Matters: If you need to change any terms (e.g., pricing, deadlines), the amendment clause should explain how to make changes with the other party’s agreement.
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13. Non-Compete and Non-Solicitation
Non-Compete and Non-Solicitation
What to Look For: Clauses that prevent you from working with competitors or soliciting clients/customers during or after the term of the contract.
Why It Matters: These clauses can limit your future work opportunities, so ensure any non-compete or non-solicitation agreements are reasonable in scope and duration.
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14. Governing Law
What to Look For: The contract should specify which state or country’s laws will govern the agreement.
Why It Matters: Knowing which laws apply helps determine how disputes will be resolved and where any legal action must take place. Make sure this is favorable for you.
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15. Entire Agreement Clause
Entire Agreement Clause
What to Look For: A clause stating that the written contract represents the entire agreement between the parties and supersedes any prior agreements or discussions.
Why It Matters: This ensures that no verbal agreements or prior understandings will conflict with the written contract terms. It protects you from someone later claiming there were side agreements not included in the contract.
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16. Assignment Clause
What to Look For: Determines whether the rights or obligations under the contract can be transferred to another party.
Why It Matters: If the other party assigns the contract to a third party without your consent, it could lead to performance issues. Ensure the assignment clause requires your approval.