THE LIFE CYCLE OF A CONTRACT
This section gives you an overview of the life cycle of a typical contract:
Negotiations and standard
terms
Before a contract
can come into existence, there will usually have to be some negotiations.
If it is an agreement for a fairly standardised product, the
negotiations may be very short indeed. But if the work which
needs doing is more complex, then more detailed discussions may
well be necessary. Chapter 2 explains how you can protect yourself
against the legal pitfalls of negotiations. It also explains
how to use standard terms and conditions effectively.
The Scope of Work
The Scope of
Work is the part of the contract which sets out exactly what
work needs to be done. It is one of the most important parts
of the contract but is often overlooked. Chapter 3 explains what
you should cover in your Scope of Work and Chapter 4 tells you
how to build it into the contract itself.
The small print
Towards the
end of the negotiations, there will normally be discussions about
the detailed terms of the contract, including issues like termination
rights, warranties, liability and other "small print".
Chapter 4 explains what is meant by most of the clauses you are
likely to come across. It also tells you what changes you should
make in order to protect your business.
Finalising the deal
Once the small
print has been agreed, both sides should be ready to sign. You
need to make sure you do this properly otherwise your contract
may turn out not to be worth the paper it is written on. Chapter
5 tells you what to watch out for.
Problems during the life of
the contract
Problems which
can occur during the life of a contract include:
- the supplier fails
to deliver on time
- the supplier's work is not up to standard
- the customer fails to pay on time
Chapter 6 explains how you may be able to use the contract to your advantage in these situations. It also looks at:
- chasing late payments
- making changes to the contract
- going to court
The death of a contract
If everything
has gone according to plan, a contract will normally come to
an end when the supplier has done his work properly and the buyer
has paid him for it in full. But sometimes contracts come to
end prematurely. For example, one side may have a right to terminate
the contract by giving a six months' advance warning to the other.
This is discussed in Chapter 6.
Using lawyers
If you have
bought this book then you are obviously intending to do a certain
amount of work on contracts yourself. But that doesn't mean that
you should never use lawyers. Chapter 7 tells you how you can
make use of them in a cost-effective way.
