It might come as a surprise coming from a lawyer, but by far the most important “clause” in any commercial contract, that needs thorough review and negotiation, is the scope of supply.
In many instances, the terms and conditions are passed onto lawyers to review and negotiate. And in doing so, the negotiation will invariably turn to the fine print and the legalese. The importance of the legalese varies depending on the circumstances but in many cases for some reason the scope of supply, the delivery milestones and other key deliverables for both parties take a back seat. And in my experience, by the time you come back to negotiate that first statement of work, everyone has a little bit of negotiation fatigue and just wants to sign up and get on with it!
Invariably, when issues arise it will relate to a mismatch between expectations and meeting or exceeding those expectations. It’s only when that happens that the other legal terms come into play – that is, we are not happy – can we terminate? We are behind because the customer didn’t provide “x” – can we get an extension? Because we expected delivery by now, we have incurred a huge loss – can we pass it on?
The more time and effort you can put into the defining, drafting and negotiation of the scope of supply the less likely you will need to rely on the legal terms and conditions.
So, here’s my recommendation – spend the time getting the scope of supply and all key requirements negotiated well before engaging the legal team!