Commercial Agreement Clauses PDF

 In the environment of Globalisation, cross-border transactions are fairly
routine.
 When the parties to a contract are located in more than one state, or perhaps
more than one country, it may not be clear which state’s laws govern the
arrangement.
 Therefore, commercial contracts should always specify the state that will have
jurisdiction over the agreement, so that it is perfectly clear which laws are
applicable.
 A jurisdiction clause will state where any cause of action relating to the
contract will be brought and what laws will be applied.
 Your intellectual property is one of your most valuable assets & for many firms, their entire business.
A confidentiality and intellectual property ownership clause does 2 main things:
 Protects confidential data, business practices, trade secrets, and processes from being disclosed or used
by your contracting partner
 Makes it clear that you retain your ownership of your intellectual property, even if you allow the other
party to use it
 When two or more firms enter into a contract, there will no doubt be a significant exchange of
information in order for both sides to perform their contractually stipulated obligations.
 In light of the need to furnish certain information about each side’s financial and business practices, it
is imperative for the contract to contain a strongly worded confidentiality clause.
 This should preclude both sides from divulging any and all information that is shared during the
course of the transaction
 The term “force majeure” is a French phrase that translates “superior force.”
Contracts don’t last forever.
 It should always be included in commercial contracts, as it can protect parties from
circumstances that arise that are beyond anyone’s control.
 This type of clause can allow a contract to be terminated without penalty should the
cost of materials go above a certain rate or if a natural disaster strikes and makes
honoring the contract terms impossible.
 The definition of force majeure is rather broad, with many contracts including
wording about things like terrorist attacks and even acts of God.
 This clause is important to include to ensure that any failure to perform due to such an
unforeseeable disruption is not considered a breach.
 In commercial contracts, negotiations are often ongoing, and there is usually
constant communication between the two parties. This can lead to problems if
there is a contract dispute.
 In business, things often do not occur as planned. which involves the inclusion of
a termination clause. It must clearly state circumstances under which one or
both parties may terminate the contract, irrespective of the time left under the
agreement.
 Eg: If one of the parties is acquired by another entity, the other party to the
contract may reserve the right to terminate the agreement.
 Even the most well-drafted contracts are susceptible to conflict. A lawsuit over even a
small breach of contract can drag on for years.
 This keeps your business from being able to move forward, and it forces you to sink
more money into legal costs.
 As a result, it is of the utmost importance to clarify the parties plans for dispute
resolution in the event that an issue arises. It is now common practice for firms to
include an arbitration clause, requiring the parties to submit to arbitration prior to or
in lieu of seeking a remedy via litigation.
 This is generally a faster, cheaper way to solve contract-related problems, although
some contracts still allow for traditional legal recourse.
 In light of the frequency of contract breaches and in an effort to deter them, it is also
standard practice for commercial contracts to contain clauses related to damages.
 Damages clauses serve two critical functions in a commercial contract. They provide
certainty in the event of a breach of contract, and they help avoid breaches by making
the penalties clear to both sides.
 In general, liquidated damages will be included, which is usually a predetermined
amount that will be owed if one side fails to perform.
 The Court may also award other types of damages beyond that amount depending on
the nature and impact of the breach.

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 In the environment of Globalisation, cross-border transactions are fairly

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