Drafting a solid, clear contract that leaves no room for misinterpretation, mistakes, or oversights doesn’t need to be daunting. Here are our five tips for lessening the administrative headache while protecting the interests of everyone signing on the dotted line.
The contract should specify each party’s respective responsibilities and communication processes related to the outsourced activities. Clearly describe who does what at each stage to ensure that everything runs smoothly.
Each outsourced activity is different. The contract should reflect this by being suitable and related to the specific activities being undertaken. If you borrow a contract used by your company for another purpose (for example, another wholesaler) you risk the final contract having glitches or not being understandable. Or, you might waste time trying to tweak the wording to make it fit your intended use.
Long contracts with no sections or chapters that leave you flipping through pages to find information are never a good thing. Copy the sections and follow the order of the Good Manufacturing Guidelines or Good Distribution Guidelines. That way, contract acceptors have signposts or a table of contents to easily refer to information, and make changes where needed.
This is a simple visual way of breaking down who does what. Consider it the picture book version of a contract. Pretty, easy to grasp, and without unnecessary words.
It may seem like two’s a company and three’s a crowd where drafting contracts is concerned, but you’ll be happy that once a contract is implemented, the left hand knows what the right is doing. Tasks and responsibilities are spelled out in one contract instead of two, which not only gains time but cuts down on any discrepancies between contracts. This is very useful, especially in complex supply chains.
To sum up, it might be tempting to use an existing contract to cut corners and save time, but in the end using a template won’t be a simple cut-and-paste exercise. You’ll need to get clear on the duties of each party and spell it out in a responsibility matrix. Where possible, keep it short and sweet and well laid-out so that no one gets a headache reading through a huge file. Lastly, put all agreements into one umbrella contract to avoid mistakes, differences and oversights. Do this, and drafting contracts will be smooth sailing.