Summary. This guide is about writing contract language that means one thing: the structural choices that prevent disputes, the definitions discipline that most drafting failures trace back to, the difference between conditions and covenants and why it decides remedies, the verbs that allocate obligation and discretion, sentence construction that keeps modifiers where you put them, the boilerplate that actually does work, and the consistency review that catches the ambiguities introduced in the last two negotiation rounds — closing with a clause library of formulations that have caused trouble and their fixes.


Every interpretive doctrine exists because somebody wrote something unclearly. The ejusdem generis canon exists because catch-alls are drafted lazily. The parol evidence rule exists because agreements are incompletely written. Contra proferentem exists because the drafter had the last word and used it carelessly.

Which means the entire body of interpretation law is, from a drafter's perspective, a list of failure modes. This guide works through them in the order they appear in a document.

Part 1 — Structure

Order the document so a reader can find things. A workable sequence:

  1. Preamble and parties, with the effective date.
  2. Recitals, kept short and factual. Do not put obligations in recitals; they are frequently held not to be operative.
  3. Definitions.
  4. The deal — the core exchange, stated first and plainly.
  5. Performance obligations, in the sequence they occur.
  6. Price and payment.
  7. Representations and warranties.
  8. Covenants.
  9. Conditions.
  10. Term and termination.
  11. Remedies, indemnity, and limitation of liability.
  12. Confidentiality and intellectual property.
  13. Dispute resolution.
  14. General provisions.
  15. Signature blocks, exhibits, and schedules.

Number everything hierarchically — 7.2(c)(iii) — so that cross-references and amendments can be precise.

Use headings, and add a statement that headings are for convenience only and do not affect interpretation.

Keep exhibits genuinely separate. An exhibit that contains substantive obligations creates a conflict with the body. If it must, add an order-of-precedence clause and follow it.

Part 2 — Definitions

Most drafting failures trace back to definitions. The discipline:

Define a term only if you use it more than twice, or if its ordinary meaning is not what you mean.

Define it once, in the definitions section, alphabetically — not scattered inline through the document where nobody will find it.

Capitalize defined terms everywhere and never use a capitalized term that is not defined. Then run a check: every capitalized term appears in the definitions, and every definition is used.

Do not put obligations inside definitions. "'Deliverables' means the items listed on Schedule A, which Supplier shall deliver by March 1" buries an obligation where nobody looks for it. Define the noun; state the obligation in an operative section.

Do not define a term in a way that contradicts its ordinary meaning without flagging it. "'Business Day' means any day other than a Saturday, Sunday, or day on which banks in New York are authorized to close" is fine. "'Product' means services" is a trap for every reader.

Define the terms that carry money. Net Revenue, Gross Proceeds, Cost, Margin, EBITDA, Confidential Information, Change of Control, Material Adverse Effect, Territory, Field of Use, and Term. If a defined term determines a payment, define it with a worked example in an exhibit.

Watch for defined terms with embedded assumptions. "'Competitor' means any person engaged in the Business" requires "Business" to be defined tightly, or the non-compete reaches the whole economy.

Part 3 — Verbs: obligation, discretion, and condition

The vocabulary allocates power, and it should be used consistently:

Word Means Use for
shall has a duty to Obligations of a party
shall not has a duty not to Prohibitions
may has discretion to Permissions and rights
may not is not permitted to Prohibitions on a right
is entitled to has a right to receive Entitlements
must Expresses a condition, not a duty Conditions precedent
will Future fact, or a soft obligation Avoid for obligations; ambiguous
is / means Definition or statement of fact Definitions, representations

Assign every obligation to a named party. "Notice shall be given" leaves open who gives it. "Buyer shall give Seller written notice" does not.

Avoid "shall use its best efforts to ensure that" — this is a duty to try, not a duty to achieve, and it is the least enforceable formulation in contract drafting.

Distinguish conditions from covenants, because the consequences differ entirely:

  • A covenant is a promise. Breaching it gives rise to a claim for damages, and — if material — a right to terminate.
  • A condition is an event that must occur before a duty arises. Non-occurrence means no duty, without any breach and without any damages claim.

"Buyer shall obtain financing by March 1" is a covenant; if Buyer fails, Buyer is in breach. "Buyer's obligation to close is conditioned on Buyer obtaining financing by March 1" is a condition; if financing is not obtained, Buyer simply does not have to close.

Say which you mean. Use "it shall be a condition precedent to [X's] obligation to [Y] that..." for conditions, and reserve "shall" for covenants. Courts disfavor forfeiture and will construe an ambiguous provision as a covenant rather than a condition — which may not be what the drafter wanted.

Part 4 — Sentences

One idea per sentence. If a sentence has three commas and a semicolon, it has three ambiguities.

Break lists into subparts with hanging indents:

Seller shall: (a) deliver the Products to the Facility; (b) provide the documentation listed on Schedule B; and (c) obtain the certifications described in Section 4.3.

Put the modifier where it cannot move. The last-antecedent and series-qualifier canons exist because drafters rely on commas to allocate modifiers. If a qualifier applies to every item in a list, say so in the lead-in: "each of the following, in each case in writing:". If it applies to only one, put it in that subpart.

Prefer the active voice, because the passive voice hides the actor. "The Report shall be delivered" is a sentence with no obligor.

Say the number twice where it matters: "thirty (30) days." And check that the numeral and the words agree.

Use "or" and "and" carefully, and consider "and/or" a defect — write "A, B, or both."

Avoid "notwithstanding anything to the contrary herein" unless you have identified what it overrides. In a document with four such clauses, nobody can determine the priority order. If you need precedence, state it explicitly.

Cross-reference by section number and by subject: "as described in Section 7.2 (Indemnification)". Then, in the consistency pass, check that Section 7.2 is still Indemnification.

Part 5 — The boilerplate that does real work

Most general provisions are inert. These are not.

Order of precedence. Where there is a master agreement, exhibits, schedules, statements of work, and purchase orders, say which controls:

In the event of a conflict, the following order of precedence applies: (a) this Agreement; (b) any Statement of Work executed by both parties, but only as to the specific engagement it describes and only where it expressly identifies the conflicting provision of this Agreement and states the intent to supersede it; (c) the Exhibits; and (d) any purchase order or acknowledgment, whose preprinted terms are of no effect.

That last clause matters. Purchase orders with conflicting preprinted terms are the origin of a great many disputes. See The Battle of the Forms Under UCC Section 2-207.

Merger clause, plus a non-reliance clause, which is the stronger of the two against a fraudulent inducement claim:

Each party represents and warrants that in entering into this Agreement it has not relied on, and shall have no right or remedy in respect of, any statement, representation, assurance, or warranty other than those expressly set out in this Agreement.

Joint drafting, to displace contra proferentem if that is the intent:

The parties have participated jointly in the negotiation and drafting of this Agreement. Any rule of construction to the effect that ambiguities are resolved against the drafting party shall not apply.

Notice. Method, address, and when deemed given. Address email expressly — permitted or not, and if permitted, whether it alone suffices for termination notices. This provision decides more disputes than its length suggests.

Survival. List the sections that survive termination, by number. A generic "provisions which by their nature should survive" invites argument.

No waiver, with the understanding that a course of performance inconsistent with the clause can waive the clause itself in some jurisdictions. The operational fix is to object in writing each time and reserve rights.

Amendment in writing, signed by both parties.

Assignment, and whether a change of control constitutes an assignment. Say it.

Severability, with a reformation preference: an unenforceable provision is modified to the minimum extent necessary rather than struck.

Governing law and forum, chosen deliberately — including for the interpretive consequence that a four-corners jurisdiction excludes extrinsic evidence a contextual one admits. See Choice of Law, Forum Selection, and Where Your Dispute Will Be Decided.

Counterparts and electronic signature, which matter for enforceability. See Electronic Signatures and Records Under E-SIGN and UETA.

Part 6 — The clause library: formulations that cause trouble

Problem formulation Why it fails Fix
"including" Expressio unius — may be read as exhaustive "including without limitation"
"or other cause beyond the party's control" Ejusdem generis limits it to the enumerated kinds "…whether or not similar to the foregoing and whether or not foreseeable"
"best efforts" No settled meaning; may equal reasonable efforts Define by conduct: personnel, spend, or a listed set of actions
"reasonable time" Invites a factual dispute State the number of days
"material breach" Requires litigation to define Define materiality, or list the breaches deemed material
"promptly" Unenforceable in practice "within five (5) Business Days"
"satisfactory to Buyer" Risks illusoriness "satisfactory to Buyer, such satisfaction not to be unreasonably withheld," or an objective standard
"shall use its best efforts to cause its affiliates to…" A duty to try, over parties not bound Bind the affiliates, or make it an obligation to achieve a stated result
"and/or" Ambiguous "A, B, or both"
"notwithstanding anything to the contrary" (used repeatedly) Creates an unresolvable precedence problem State an express order of precedence once
"the parties will negotiate in good faith to agree" Frequently an unenforceable agreement to agree Supply a default term or a formula that applies absent agreement
"time is of the essence" (omitted) Late performance may not be material breach Include it where deadlines matter — and mean it
"indemnify and hold harmless" May not reach the indemnitee's own negligence State expressly whether the indemnitee's own negligence is covered
"consequential damages are excluded" Does not define consequential; may swallow the deal or nothing Enumerate the excluded categories, and state the carve-outs from the cap
"this Agreement is the entire agreement" May not bar fraud Add a non-reliance representation
"Schedule A attached hereto" (not attached) The provision may fail Attach it; confirm in the consistency pass

Part 9 — Drafting the provisions that carry the most risk

Six provisions account for most of what goes wrong. Each deserves its own attention.

Representations and warranties

Know what each does. A representation is a statement of fact as of a moment; its falsity supports a misrepresentation claim and, in a transaction, a closing condition. A warranty is a promise that a fact is true; its falsity is a breach of contract. Many agreements say "represents and warrants" and get both, which is usually right — but the remedies differ, and the survival period should be stated for each.

Qualify deliberately. "To the Knowledge of Seller" needs Knowledge defined — actual knowledge, or knowledge after reasonable inquiry, and of which individuals, named. "Material" needs a standard or it needs to be omitted.

State the survival period and whether it runs to a claim being made or to suit being filed.

Indemnification

Answer five questions in the text:

  1. Which losses — third-party claims only, or first-party losses too?
  2. Does it cover the indemnitee's own negligence? In most states this requires clear and unmistakable language, and in several it must be conspicuous.
  3. Is there a separate duty to defend, which arises earlier and on a broader standard than the duty to indemnify?
  4. Who controls the defense and settlement, and what consent is required?
  5. Is indemnity subject to the liability cap or carved out of it?

Limitation of liability

Three components, each stated separately: the exclusion of consequential, incidental, indirect, special, and punitive damages, with the categories enumerated rather than labeled; the cap on direct damages, stated as an amount or a formula, and stated as aggregate or per-claim; and the carve-outs from both — typically indemnity obligations, confidentiality breaches, intellectual property infringement, gross negligence and willful misconduct, and the payment obligation.

Then address the failure-of-essential-purpose problem: state that the consequential damages exclusion survives the failure of any limited or exclusive remedy.

Termination

Separate the grounds, because they operate differently: for convenience (notice period, no cause); for cause (breach, notice, cure period, and — best practice — a list of breaches deemed material); for insolvency (noting that ipso facto clauses are frequently unenforceable in bankruptcy); and by mutual agreement.

Then say what happens after: the survival list by section number; the treatment of work in progress, prepaid amounts, and deposits; the return or destruction of confidential information and data; transition assistance and its cost; and license or access rights that continue.

Confidentiality

Define Confidential Information with the standard exclusions — already known, independently developed, publicly available through no fault, rightfully received from a third party — and address compelled disclosure, requiring notice and cooperation rather than prohibiting compliance with law.

Set a duration, and consider a longer or perpetual term for trade secrets specifically, since a fixed term can undermine trade secret status. See Protection of Trade Secrets.

Decide about residual knowledge. A residuals clause permitting use of unaided memory is common in technology agreements and materially favors the receiving party; disclosing parties should understand what it gives away.

Dispute resolution

Scope matters most. "Arising out of or relating to this Agreement" is materially broader than "arising under," and the difference determines whether tort and statutory claims are covered.

Then decide, deliberately: litigation or arbitration; if arbitration, the rules, the seat, the number of arbitrators, and whether discovery is available; carve-outs for injunctive relief and for collections; class and jury waivers; fee shifting; and whether a mediation step is a condition precedent. See Selecting and Drafting an Arbitration Clause and Arbitration, Mediation, and Choosing a Dispute Resolution Forum.

Part 7 — The consistency review

Most patent ambiguities are introduced in the last two negotiation rounds, when a term is changed in one place and not another. The review that catches them takes forty minutes and should be run on the final document, every time.

  • Every capitalized term appears in the definitions; every definition is used.
  • Every cross-reference points to the right section, and the parenthetical subject matches.
  • Every exhibit and schedule referenced exists, is attached, and is titled as referenced.
  • Every number appears once in numerals and once in words, and they agree.
  • Every date is consistent across the document, including the effective date and any term calculated from it.
  • Party names are used consistently — no stray references to a party name from the form the document started as.
  • Every obligation has a named obligor.
  • The survival list matches the sections that should survive, by current number.
  • The order of precedence clause matches the documents actually delivered.
  • The notice addresses are current, and the notice method is one the parties will actually use.
  • Defined terms in exhibits match the body's definitions.
  • Signature blocks name the correct entities with the correct titles.
  • Read the termination, remedies, and limitation of liability provisions together, once, to confirm they produce a coherent result.
  • Read the whole document once more, straight through, out loud if it is short enough.

Then run one more pass asking a single question: for each provision, what does it do? A sentence whose work you cannot state is a sentence a court will assign work to, and it may not be the work you intended.

Part 10 — Working from a form, and negotiating a redline

Almost no contract is drafted from nothing. The discipline of working from a form is its own skill.

Read the whole form before editing it. A form carries assumptions — about who the parties are, what the deal is, which side it favors, and which jurisdiction's law it was written for. Editing without reading produces documents with a stray reference to "Licensee" in a supply agreement.

Identify the form's bias. Every form was drafted for someone. Ask which side it favors on: representations and their qualifiers; indemnity direction and scope; the liability cap and its carve-outs; termination rights; and dispute resolution. Then decide whether that bias is yours.

Strike what does not apply. A clause that has no work to do in this deal is not harmless — it invites an interpretation you did not intend, and a court will strain to give it meaning.

Do not delete a defined term without checking its uses, and do not add one without adding a definition. The consistency review in Part 7 exists because this happens constantly.

On redlines:

  • Redline against the last version you sent or received, and say in the cover email which version you compared against. Redlines against the wrong base are the most common source of confusion in a negotiation.
  • Keep a clean copy and a redline at every exchange, and keep every version.
  • Use comments to explain material changes, briefly. "Adding a carve-out for IP indemnity, consistent with our standard" moves a negotiation faster than an unexplained edit.
  • Do not make silent substantive changes. It is a reputational matter, it destroys trust, and — if the other side discovers it after signing — it supports a claim.
  • Track open issues in a separate issues list, not only in the document. The list is what the business people can read.
  • After every round, re-run the consistency pass. The last two exchanges are where the ambiguities are introduced.
  • Confirm the final version before signature. Compare the execution copy against the last agreed redline, word by word if the deal warrants it. Signature-copy discrepancies are rare, expensive, and entirely preventable.

And a note about negotiating leverage. Not every provision is worth fighting for. Rank the terms by economic and risk significance before the first call — typically: the deal terms; the liability cap and its carve-outs; indemnity; termination; and IP ownership. Everything below that line is negotiable currency. A negotiator who fights equally hard on every provision loses on the ones that matter, because the other side stops distinguishing.

Part 8 — A worked before-and-after

Before:

Supplier will use its best efforts to deliver the Products promptly following receipt of Buyer's order, and Buyer shall pay the invoice amount within a reasonable time thereafter. Supplier shall not be liable for any delays caused by circumstances beyond its reasonable control including strikes, fires, or acts of God. This Agreement may be terminated by either party upon notice.

Six problems. "Best efforts" is undefined. "Promptly" is unenforceable. "Reasonable time" invites a dispute. The catch-all is ejusdem generis-limited to the enumerated kinds. "Including" may be read as exhaustive. "Upon notice" states no period, no method, and no distinction between termination for cause and for convenience.

After:

4.1 Delivery. Supplier shall deliver each Product order to the Facility within ten (10) Business Days after Supplier's receipt of a conforming purchase order. Time is of the essence with respect to delivery.

4.2 Payment. Buyer shall pay each undisputed invoice within thirty (30) days after receipt. Amounts not paid when due bear interest at one percent (1%) per month or the maximum rate permitted by law, whichever is less.

4.3 Excused Delay. Supplier's failure to deliver within the period required by Section 4.1 shall be excused, for the duration of the event and for a reasonable period thereafter, to the extent caused by fire, flood, earthquake, epidemic, war, terrorism, labor disruption, government order (whether or not valid), embargo, failure of a utility or telecommunications provider, or any other cause beyond Supplier's reasonable control, whether or not similar to the foregoing and whether or not foreseeable, provided that Supplier gives Buyer written notice within five (5) Business Days of becoming aware of the event and uses commercially reasonable efforts to mitigate. Supplier's obligation to pay money is not excused by this Section.

12.1 Termination for Convenience. Either party may terminate this Agreement for any reason upon sixty (60) days' prior written notice to the other party, given in accordance with Section 15.4.

12.2 Termination for Cause. Either party may terminate this Agreement upon written notice if the other party materially breaches and fails to cure within thirty (30) days after written notice describing the breach in reasonable detail. For purposes of this Section, the following are deemed material breaches: [list].

What changed. Every obligation has an obligor, a deadline, and a consequence. The catch-all escapes ejusdem generis. The payment carve-out prevents the excuse clause from suspending money. And termination is split into two provisions doing two different things.

Part 11 — Frequently asked questions

"Should I use a template from the internet?" As a starting checklist of topics, sometimes. As a document to sign, no — it was drafted for a different deal, in a different state, favoring a different party, and it will contain defined terms that do not match, obligations for parties that do not exist, and provisions that are unenforceable where you are.

"How long should a contract be?" As long as the deal's risk warrants. A $4,000 one-time services engagement does not need thirty pages. A five-year exclusive supply agreement with a custom tooling investment does. The failure mode in both directions is real: over-lawyered documents do not get read, and under-lawyered ones do not address what happens when it goes wrong.

"The other side says 'that's just standard.'" Nothing is standard. Ask what the provision does and whether it does it to you or for you. "Standard" is a negotiating position, not a description.

"They won't sign unless we drop the limitation of liability." Then price the risk. An uncapped liability on a $60,000 engagement is a different transaction than a capped one, and the answer may be a higher fee, a narrower scope, insurance, or declining the work.

"We're just going to do this on a purchase order." Then read the purchase order's preprinted terms, because they are the contract. And know that if both sides send forms, UCC § 2-207 determines which terms survive — frequently neither party's.

"Can we just say 'the parties will work it out'?" An agreement to agree is frequently unenforceable. If a term must be left open, supply a default that applies absent agreement — a formula, a benchmark, a third-party determination, or a stated fallback — so that the contract works even if the negotiation does not.

"How do I make sure a clause survives termination?" List it, by section number, in the survival clause. Do not rely on "provisions which by their nature should survive."

"What is the one habit that most improves drafting?" Reading the final document straight through, once, asking of each sentence: what does this do, and who does it? Most defects are visible on that pass and invisible on every other.

"And the one that most prevents disputes?" Writing down what the parties actually do during performance — the acceptances, the objections, the invoices, the confirmations. Course of performance is the most persuasive evidence of meaning that exists, and it accumulates for free.

Part 12 — Drafting for the reader who is not a lawyer

The people who perform a contract are rarely the people who drafted it, and a document nobody in operations can follow will not be followed. Two audiences, one document.

Write the operative obligations in language an operations manager can act on. "Supplier shall deliver each order to the Facility within ten (10) Business Days after receipt of a conforming purchase order" is a sentence someone can put on a whiteboard. "Supplier shall use commercially reasonable efforts to effect timely delivery in accordance with the parties' mutual expectations" is not.

Put the numbers in a schedule. Prices, quantities, service levels, deadlines, and contacts belong in a table that can be handed to the people who need them, and updated by amendment to the schedule rather than to the whole agreement.

Add a plain-language summary where the audience warrants it — a one-page cover describing what each party must do, by when, and what happens if they do not. State expressly that the summary is for convenience and that the agreement controls. Consumer-facing and employee-facing agreements in particular benefit, and several regulatory regimes now require plain-language disclosure.

Design for the moment of use. Someone will look for the notice address at 4:45 on a Friday, and someone else will look for the termination provision during a crisis. Headings, a table of contents on any document over fifteen pages, and consistent placement of the general provisions make those searches fast.

Then socialize it. The contract that gets performed is the one the operations, finance, and sales teams have read. A twenty-minute walkthrough after signature — here are the deadlines, here is who gives notice and how, here is what triggers termination, here is what we promised — prevents more disputes than any clause in it.

And keep the executed original where it can be found, with the schedules, the amendments, and the notice addresses current. A meaningful fraction of contract disputes begin with neither party being certain which version was signed.

Part 13 — Ten drafting rules, in order of value

If a drafter adopted only ten habits, these would be the ten.

  1. Define every term that carries money or risk, once, in the definitions section, and use it consistently.
  2. Assign every obligation to a named party with a deadline and a consequence.
  3. State numbers, not adjectives. "Within ten (10) Business Days," not "promptly." "$250,000," not "a reasonable amount."
  4. Say "including without limitation," and add "whether or not similar to the foregoing" to any catch-all meant to be broad.
  5. Distinguish conditions from covenants, and say which you mean.
  6. State an order of precedence among the agreement, exhibits, statements of work, and purchase orders — and neutralize preprinted purchase order terms expressly.
  7. List the surviving sections by number.
  8. Write the notice clause carefully, and address email expressly. More rights are lost to a defective notice than to any interpretive doctrine.
  9. Add a non-reliance clause, not just a merger clause.
  10. Run the consistency pass on the final document, every time, because the last two negotiation rounds are where the ambiguities are introduced.

Nine of the ten cost nothing but attention. The tenth costs forty minutes and prevents the disputes that the entire body of interpretation law exists to resolve.

Part 14 — A second worked before-and-after: the services engagement

Before — an actual pattern, lightly disguised:

Consultant will provide the services described in the attached proposal. Client will pay Consultant's fees as set forth therein. Either party may terminate this agreement at any time. Consultant retains ownership of all work product until paid in full. Client agrees to indemnify Consultant against any claims arising from the engagement. This agreement is governed by the laws of the state where Consultant is located.

Eight problems. The scope lives in a marketing proposal. Payment timing is unstated. Termination has no notice period and no treatment of work in progress. Ownership after payment is unaddressed — does it transfer, and what does "work product" include? The indemnity runs one direction, covers "any claims," and is uncapped. Governing law is stated by reference to a fact that can change. There is no limitation of liability, no confidentiality provision, and no notice clause.

After:

1. Services. Consultant shall perform the services described on Exhibit A (the "Services"). Exhibit A controls as to scope; any proposal, marketing material, or oral description is of no effect. Changes to scope require a written change order signed by both parties.

2. Fees and Payment. Client shall pay the fees set forth on Exhibit A. Consultant shall invoice monthly. Client shall pay each undisputed invoice within thirty (30) days of receipt. Client shall notify Consultant of any disputed amount within fifteen (15) days of receipt, with the basis stated; undisputed amounts remain payable.

3. Ownership. Upon full payment of all amounts due for the applicable Deliverable, Consultant assigns to Client all right, title, and interest in the Deliverables identified on Exhibit A. Consultant retains all right, title, and interest in its pre-existing materials and general know-how, and grants Client a perpetual, non-exclusive, royalty-free license to use them solely as incorporated in the Deliverables. Consultant shall not incorporate third-party or open-source materials into any Deliverable without Client's prior written consent, and shall identify any such materials and their license terms on Exhibit A.

4. Confidentiality. [Standard mutual provision with defined term, exclusions, compelled-disclosure procedure, and a stated duration.]

5. Term and Termination. This Agreement continues until the Services are complete unless terminated earlier. (a) For convenience: either party may terminate upon thirty (30) days' written notice, in which case Client shall pay for Services performed and expenses incurred through the effective date, and Consultant shall deliver all work in progress. (b) For cause: either party may terminate upon written notice if the other materially breaches and fails to cure within fifteen (15) days after written notice describing the breach.

6. Limitation of Liability. Neither party shall be liable for indirect, incidental, special, consequential, exemplary, or punitive damages, or for lost profits, lost revenue, or loss of data, even if advised of the possibility, and this exclusion survives the failure of any limited or exclusive remedy. Each party's aggregate liability shall not exceed the total fees paid or payable under this Agreement, except that this cap does not apply to (i) Client's payment obligations, (ii) either party's indemnification obligations under Section 7, (iii) breach of Section 4, or (iv) gross negligence or willful misconduct.

7. Indemnification. Consultant shall indemnify, defend, and hold harmless Client from third-party claims alleging that a Deliverable infringes a United States patent, copyright, trademark, or trade secret, except to the extent arising from Client-supplied materials or Client's modification. Client shall indemnify, defend, and hold harmless Consultant from third-party claims arising from Client-supplied materials or from Client's use of a Deliverable other than as contemplated by this Agreement. In each case the indemnified party shall give prompt written notice, the indemnifying party shall control the defense, and no settlement imposing an obligation on the indemnified party shall be made without its consent.

8. Notices. All notices shall be in writing and delivered by personal delivery, nationally recognized overnight courier, or certified mail, return receipt requested, to the addresses on the signature page, and shall be deemed given upon receipt. Email does not constitute notice under this Section.

9. Governing Law; Venue. This Agreement is governed by the laws of the State of ______, without regard to conflicts of law principles. The parties consent to the exclusive jurisdiction of the state and federal courts located in ______ County, ______.

10. Survival. Sections 3, 4, 6, 7, 8, 9, and this Section 10 survive termination.

What changed, and why it matters. The scope moved out of a sales document and into an exhibit. Payment has a date and a dispute procedure. Ownership is a real assignment with a real carve-out for pre-existing materials. Termination is split by ground, with treatment of work in progress. Liability is capped with stated carve-outs and survives remedy failure. Indemnity runs both directions with a defined scope and defense procedure. Notice specifies a method — and says email is not it, which is the sentence that prevents the argument. And survival is a list of numbers.

Total additional drafting time: perhaps ninety minutes. Total disputes prevented: most of them.

Related documents

This guide is educational and not legal advice. States differ on the effect of merger and non-reliance clauses, on effort standards, on the enforceability of liability limitations, and on the weight given to individual canons. Consult counsel in the governing jurisdiction.