03 May Use this Contract Drafting Hack
I did something pretty embarrassing last week.
We had a couple of tenants for a rental unit I was handling and I was presenting them the final copy of the Lease Contract. We were going paragraph by paragraph when the renter says, “Attorney, mali po yung amount.” (Attorney, it’s the wrong amount).
Turns out that the old values for the old tenants were the ones left in the contract for signing. Pretty awkward moment since the client was the one who pointed it out.
Hate to be hard on myself too much, but typogrphical errors happen to the best of us. You get caught up in the broad strokes of the contract, the general direction, and sometimes, a few details fall between the cracks.
In this post, I’m going to teach you a method to help minimize typographical errors and will reduce your editing time for template contracts you issue over and over again.
So what’s the technique?
I call it compartmentalizing the contract.
Here’s how it works. For contracts you use over and over again with different people, there are always 2 kinds of provisions and information in it: variables and the standard content.
The variables are the parts of the contract that change depending on who you’re talking to. For example:
- in a lease contract, the variable items would be the name of the person renting, the amount due per month, when the payments are due, and how many month’s worth of deposits you would require at the start, etc.
- in an employment contract, the variable items would be the name of the employee, the position, the job qualifications and job description, the employment status, etc.
- in a sales contract, this would pertain to the product being sold, the terms, the amount of payment, the delivery date, etc.
Now, for the standard content, this would mean the provisions that never change for that type of transaction regardless of who you’re talking to. These are your non-negotiables.
- in the lease contract, this could mean the address of the rental unit (if only one), prohibited activities (in my case, this is operating a karaoke machine after 10pm), and the prohibition against sub-leasing the unit to other people without my consent.
- in the employment contract, this could include the benefits given to all the employees in the company, the requirement that all employees may be transferred to different branches as the need arises, or the reporting schedule.
- in the sales contract, this could mean the warranty for the product, the penalties for late payments, or how the payments should be made.
Now, here’s the cool part which I recommend for my clients.
To avoid mistakes in encoding and customizing contracts, you simply group all variable items together and place them at the start of the contract. All standard items follow after that.
What’s the effect? Whenever you need to execute this contract, you only have to look at the beginning portion where you’ve bunched all the variables together. It makes it easy to modify them because your mind can rest assured that the rest of the document stays the same.
This is the same logic they apply to shipping container yards. The ones that need to be moved first or more frequently stay at the most accessible part of the yard while the ones that will be staying immobile for a while get relegated to the back. Efficiency of movement.
The middle part stays put. That’s where you put all the standard items in. The only other thing you have to watch out for would be the end portion where names, signatures and the notarial parts appear.
Hopefully, this makes contract maintenance simpler for you.