Good and bad contracts
Although we are here for the most part not lawyers, but I think everyone has come across contracts. At a minimum, this is an apartment rental agreement, an agreement on the provision of certain services, an employment agreement, and so on. At the same time, it is considered quite normal that these documents are a “dark forest” of terms, beyond which the essence of the agreement is hardly visible.
90% of the contracts I have come across are worthless waste paper. They verbally and pretentiously describe what is understandable to everyone, bypassing important aspects. Very rarely there are good documents that really insure the risks of both parties and motivate them to fulfill their obligations.
Again, I am not a lawyer, even though I read the laws. This material in any case does not claim to be legally correct. This is nothing more than a couple of principles that will help make your contracts work. Namely - to motivate participants to fulfill their obligations with high quality and on time.
So, take the points of a typical contract for the provision of services. Let it be, say, hosting. We download any document at the request of a “hosting contract” and this is what we generally see:
In total, two pages of fine text tell us that the client pays, and the hoster does not (p. 6) answer for anything. If a client, say, DDOS, then he should act in accordance with the “current legislation”. At the same time, which provisions of the legislation are meant and which actions are necessary are not stipulated. Obviously, the value of such a document for the client is small.
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Another example - Vasya and Petya decide to start a new business and this is what they write in the contract:
I think that thousands of good ideas died without being born because of such arrangements. After all, weeks go by, and Vasya still cannot find time to draw up a business plan. Yes, and Petya is good, he sketched something in a couple of hours, and he stopped at that ...
Or maybe even their motivation was enough for a whole year of work, but suddenly Petya made an advantageous offer and he decided to leave the game. Quite a legitimate desire, but how to be Vasya, he himself will not last a day? Yes, and how to deal with the division of property? There is not a word in the agreement, and in fact it should contain the answers to these and many other questions.
The two main parts of a good contract are:
This may be one or more sections, which are a kind of reminder about:
Again, these items are used as a reminder, nothing more. The fact that Kostya, a freelancer, undertakes to draw a banner this week, does not at all mean that he will do it. After all, nowhere is it said what awaits him otherwise. And for this, just write the next section.
The heart of the treaty is its most valuable section, which should answer “unpleasant” questions, such as:
Each item should consist of the most specific definitions and figures, for example:
or:
another example:
It is clear that it is necessary to separately describe what is a suitable replacement for a departed person, what is considered a bug and what is not, and so on. But the essence, I think, is clear - from this part of the contract scenarios for the development of situations beyond the "normal" course of affairs should be clearly clear.
It is these points that will help Vasya to find time to do business, a recruiter to find and keep the right candidate, developer to do the job properly, and to test the customer on time. And they, as a result, will serve as a guarantee of long-term cooperation of the parties.
There is a saying that a strict contract is a pledge of good relations. The reverse is also true - the agreement “about nothing” will most likely lead to a conflict of the parties. This is easy to see with examples of disappointed customers and developers. But the conflict could have been settled on the pages of the agreement, but this did not happen and both parties lost time and money.
It may seem that the introduction of such draconian restrictions may make it difficult to sign a contract. This is true, because they reveal a conflict of interest at an early stage, and it is wonderful! It is probably better not to sign ten “good” contracts than to sign one “bad” one.
90% of the contracts I have come across are worthless waste paper. They verbally and pretentiously describe what is understandable to everyone, bypassing important aspects. Very rarely there are good documents that really insure the risks of both parties and motivate them to fulfill their obligations.
Again, I am not a lawyer, even though I read the laws. This material in any case does not claim to be legally correct. This is nothing more than a couple of principles that will help make your contracts work. Namely - to motivate participants to fulfill their obligations with high quality and on time.
Bad contract
So, take the points of a typical contract for the provision of services. Let it be, say, hosting. We download any document at the request of a “hosting contract” and this is what we generally see:
- Contract number, parties.
- Subject of the contract: the hoster is hosting, the client pays.
- General conditions: the procedure for changing the contract, plus general words from the “Parties are aware of their responsibility” series.
- Obligations of the parties: the client is obliged to pay on time, keep the password secret, etc., the hoster, respectively, is obliged to host.
- The procedure for the provision of services and payment: terms, amounts.
- Responsibility of the parties: the parties are responsible in accordance with the “current legislation”, and the hoster, in addition to this, does not bear any responsibility for the damage caused by its services.
- Force majeure.
- Contract time.
- Final provisions: annexes to the contract, etc.
- Details of the parties.
In total, two pages of fine text tell us that the client pays, and the hoster does not (p. 6) answer for anything. If a client, say, DDOS, then he should act in accordance with the “current legislation”. At the same time, which provisions of the legislation are meant and which actions are necessary are not stipulated. Obviously, the value of such a document for the client is small.
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Another example - Vasya and Petya decide to start a new business and this is what they write in the contract:
- We, Vasya and Petya, are launching such and such a business.
- Vasya is responsible for sales and marketing.
- Peter - for the technical part.
- Costs and income in half.
I think that thousands of good ideas died without being born because of such arrangements. After all, weeks go by, and Vasya still cannot find time to draw up a business plan. Yes, and Petya is good, he sketched something in a couple of hours, and he stopped at that ...
Or maybe even their motivation was enough for a whole year of work, but suddenly Petya made an advantageous offer and he decided to leave the game. Quite a legitimate desire, but how to be Vasya, he himself will not last a day? Yes, and how to deal with the division of property? There is not a word in the agreement, and in fact it should contain the answers to these and many other questions.
Good contract
The two main parts of a good contract are:
- The essence of the contract: 20% of the text.
- Duties and Responsibilities: 80% of the text.
The essence of the contract
This may be one or more sections, which are a kind of reminder about:
- Who agreed on what?
- When?
- On what period?
- What is the general procedure for the parties?
- All sorts of details, appearances, passwords and so forth.
Again, these items are used as a reminder, nothing more. The fact that Kostya, a freelancer, undertakes to draw a banner this week, does not at all mean that he will do it. After all, nowhere is it said what awaits him otherwise. And for this, just write the next section.
Duties and Responsibilities
The heart of the treaty is its most valuable section, which should answer “unpleasant” questions, such as:
- Who exactly is responsible for what?
- How is it ensured that both sides will not shy away from obligations?
- Who and how measures the quality of performance?
- Who pays whom and how much if obligations are fulfilled poorly?
- Who keeps records of finance? Who controls this?
- What information is confidential? How much will the cost of disclosure?
- How is this agreement terminated by agreement of the parties? And one way?
- Can a party enter into a similar agreement with 3 persons? And delegate their obligations to them?
Each item should consist of the most specific definitions and figures, for example:
Vasya and Petya undertake to do business for at least 3 months, in this connection, they put $ 500 on such and such an account. If before the expiration of 3 months one party leaves the game, the other receives the full amount on the account and the right to continue the business independently.
or:
In the case of leaving an employee at his own request, the recruiting agency undertakes to find a replacement for free within 45 calendar days. If, after 45 days, the replacement is not found, the agency's fee is reduced by $ 50 for each day of delay.
another example:
The customer undertakes to test the developed system within one calendar week after delivery. Each bug found reduces the artist's reward by $ 20. Bugs found after a week of testing are not taken into account.
It is clear that it is necessary to separately describe what is a suitable replacement for a departed person, what is considered a bug and what is not, and so on. But the essence, I think, is clear - from this part of the contract scenarios for the development of situations beyond the "normal" course of affairs should be clearly clear.
It is these points that will help Vasya to find time to do business, a recruiter to find and keep the right candidate, developer to do the job properly, and to test the customer on time. And they, as a result, will serve as a guarantee of long-term cooperation of the parties.
Summary
There is a saying that a strict contract is a pledge of good relations. The reverse is also true - the agreement “about nothing” will most likely lead to a conflict of the parties. This is easy to see with examples of disappointed customers and developers. But the conflict could have been settled on the pages of the agreement, but this did not happen and both parties lost time and money.
It may seem that the introduction of such draconian restrictions may make it difficult to sign a contract. This is true, because they reveal a conflict of interest at an early stage, and it is wonderful! It is probably better not to sign ten “good” contracts than to sign one “bad” one.
Source: https://habr.com/ru/post/132932/
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