Business transaction documents have many key components that need to be understood by clients and documented according to their wishes and those of the counterparty.
Major Considerations Advised by a Commercial Lawyer
When acting for a client, a Commercial Lawyer will advise on the following major considerations before completing documentation:
1. The Parties:
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- Who are the parties to the document?
- Are they correctly and fully described?
- ASIC searches and other checks should be undertaken.
2. Financial Capability:
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- Has due diligence been undertaken on the counterparty’s financial capability and reputation?
- Request the last 3 years’ financial statements filed with ASIC.
- Conduct PPSR, solvency, and other searches to ensure the parties are credible.
- If there are guarantors, request their balance sheet and income statement to check financial stability.
3. Deliverables:
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- Clearly agree and specify all features of the deliverables.
- For example: what, how much, when, where, quality, price, rebates, refund policy, terms of trade, etc.
4. Warranties:
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- What warranties should the counterparty provide regarding their ability to produce the deliverables?
- Has their capacity been satisfactorily validated?
5. Variations:
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- Clearly outline the process for notification, negotiation, and documentation of any variations to the deliverables or documentation.
6. Special Conditions:
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- Specify any special conditions required by the client, such as restraints, non-competition, confidentiality, etc.
7. Review of the Arrangement:
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- Insert requirements for review meetings and ensure they are properly recorded.
8. Events of Default:
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- Define circumstances under which a counterparty would commit an event of default and the client’s rights in those circumstances.
9. Complaints and Dispute Resolution:
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- Clearly specify the steps involved in handling complaints and resolving disputes to mitigate time lost and costs incurred in litigation.
Contact Me
Ensure your business transactions are properly documented and protected. Contact Jim Wilson, an experienced Commercial Lawyer, at 0415 645121 to discuss how he can assist you with your business transaction documents, tailored to your business or personal needs.