Preparation of contract

Once you have determined how the transaction should be structured, you should choose a suitable precedent for the contract. For a simple sale, such as a shop, a standard Law Society precedent is usually ideal. If the sale is more complex, then a more detailed precedent is required.

Contract negotiations

After the first draft of the contract has been submitted, there is usually a series of negotiations between the solicitors for the parties as to the terms of the contract.

Email

Exchanging marked-up and annotated versions of the agreement is useful and may lead to final agreement on the documentation. If not, it should at least narrow the issues. However, this process should not be allowed to drag on, as this wastes your time and the client’s money. It may also lead to bad blood between the parties and the parties walking away from the deal.

Teleconferences

If agreement on the form of the contracts cannot be finalized reasonably quickly by email and there are just a few outstanding issues, a teleconference can usually be arranged quickly to finalise agreement on the document. Even though it may be a teleconference with the other side, it is best to have your client with you, as you are at a disadvantage trying to negotiate when you can only communicate with your client by telephone.

Conferences

The most effective way to finalise the terms of an agreement is a conference attended by all parties and their solicitors. If there are a several technical issues, as well as some commercial issues, it may be useful to have a preliminary conference between the solicitors, to iron out the technical issues, and identify the issues requiring commercial resolution. If the parties and their lawyers meet together, and all genuinely try to resolve the outstanding issues, this is almost always successful. By the time the parties reach this point, it is unlikely that either party wishes to walk away from the deal.

See Preparation of contract.