As your business engages in its ordinary course of activities, various types of contracts such as engagement letters, vendor service agreements and consulting agreements will be negotiated and entered into. Though these contracts are often standardized and include boilerplate language, many terms remain negotiable and clients may push back on certain clauses. While the terms of these routine contracts may appear standard or unimportant, they warrant close consideration to avoid unanticipated costs and liabilities down the road.

In most cases, it is inefficient and uneconomical to contact corporate counsel each time a client pushes back on a clause or offers additional language to a routine agreement. Instead, we recommend working with corporate counsel to develop a contract playbook to streamline and standardize the process of managing contracts.

A contract playbook categorizes different types of contracts and lists the standard contractual clauses and fallback or preferred positions for each clause. It also provides a negotiator with clear guidance for negotiating certain clauses by including plain language rationale for the use of a certain clause. Most importantly, it highlights when to escalate an issue to a business approver or corporate counsel, which reduces the pressure for a negotiator to give way on crucial points to get a contract across the finish line, which could result in exposing the business to unnecessary cost and liability. Ideally, a contract playbook should allow a negotiator to complete a contract without needing to consult with corporate counsel for review and approval on frequently negotiated terms, which helps businesses remain competitive in their industry by saving time and money during contract negotiations.

If you are interested in developing a contract playbook that is tailored to your business’s needs, please contact an attorney in GCT’s Corporate Team.