You have been approached with the possibility of joining forces with another industry leader in California to arrange an oil and gas transaction that has the potential to become extremely successful. One of the first things you will be required to do is to form a contractual agreement that will detail which party will be responsible for which requirements and their subsequent outcome. Preventing contract disputes is something you must proactively be aware of in order to maintain a functional agreement.
One of the best ways to prevent contention and misunderstanding from infiltrating your ability to operate with confidence and success is to take your time negotiating your contract from the very start of communications. According to Entrepreneur, you should maintain the mindset that articulating a contract is going to take a bit of time to accomplish. Break it down into sections and focus time on each aspect of the contract. A term sheet can give you direction as to which specific clauses you want and need to include in your content.
When negotiating terms and conditions, remember to be realistic in your asking. While you do not want to give up all of your benefits, maintain a degree of flexibility and be willing to compromise on some aspects. Remember that your first draft will be rough and that you can polish it as you go along and revise your document before making it final. If at any time, you are questioning the effectiveness of your communication, make sure that you clarify any misunderstandings from the very start to avoid disruptions and disagreements further down the road.
The information in this article is intended for educational purposes only and should not be taken as legal advice.