The 4 Most Common Mistakes in Commercial Agreements and How to Avoid Them

A well-written commercial agreement is essential to protect your interests. Whether it’s a supply, partnership, distribution or procurement agreement, an unclear or incomplete wording can lead to disputes, financial losses and reputational damage. Many companies make avoidable mistakes when drafting contracts: knowing what they are is the first step to prevent them.

Vague or ambiguous clauses

Many contracts contain generic terms such as “within a reasonable time” or “adequate quality.” These formulations leave room for subjective interpretation.

Risk:
In the event of a dispute, vague clauses may not protect you and make it difficult to defend your rights.
How to avoid it:
Use specific and measurable terms. For example: “Delivery shall take place within 30 days of the order date.”

Lack of a Termination Clause

Many contracts fail to specify how and when a party can terminate the agreement in the event of difficulties, defaults, regulatory changes or excessive price increases.

Risk:
Remaining tied to relationships that are no longer working, with potential financial losses or operational disruptions.
How to avoid it:
Always include a unilateral termination clause with notice, or a clause tied to specific events such as delays or regulatory changes.

Incorrect choice of jurisdiction

In agreements with foreign or non-regional counterparties, neglecting to specify the competent court can create enormous complications.

Risk:
Having to deal with courts or bodies in distant, unfavorable or little-known locations.
How to avoid it:
Include a clear territorial jurisdiction clause, so you always know where and how any disputes will be handled.

Using generic templates found online

Copying a contract template found online is one of the most dangerous mistakes.

Reason:
Every contract must be customized on the basis of your business, the counterparty, the market and applicable regulations.
How to avoid it:
Rely on a law firm specializing in commercial contracts, which can create a tailored, comprehensive and legally sound document.

Relying on experienced professionals means transforming the contract into a tool for protection and growth, capable of safeguarding your reputation and profits. The Law Firm of Attorney Tanya Zanotti is ready to assist you in drafting secure, customized and legally sound contracts: contact the firm for a consultation!

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