# Clause Redraft Templates ## Payment Terms Templates ### Template: Standard Net 30 **Problematic**: "Payment due upon completion" **Balanced Version**: ``` Payment Terms: Client shall pay all fees within 30 days of the invoice date. Invoices shall be issued monthly or upon completion of milestones as defined in Exhibit A. Late payments subject to a 1.5% monthly service charge. ``` **Protective Version (for vendor)**: ``` Payment Terms: Client shall pay all fees within 15 days of invoice date. Invoices not paid within 30 days may result in suspension of services. Client responsible for all collection costs including reasonable attorney fees. ``` ### Template: Milestone-Based Payment **Problematic**: "Pay when the work is done" **Balanced Version**: ``` Payment Schedule: - 25% upon execution of this Agreement - 25% upon completion of Phase 1 (as defined in Exhibit A) - 25% upon completion of Phase 2 - 25% upon final delivery and acceptance ``` --- ## Termination Templates ### Template: Termination for Convenience **Problematic**: "Either party can end this anytime" **Balanced Version**: ``` Termination: Either party may terminate this Agreement with 30 days written notice. Upon termination: (a) Client shall pay for all work completed through termination date; (b) Vendor shall deliver all work product completed to date; (c) All Confidential Information shall be returned or destroyed within 10 days. ``` **Protective Version (for ongoing services)**: ``` Termination: Either party may terminate with 60 days written notice. Client remains obligated to pay for the notice period. Early termination (without cause) requires payment of a termination fee equal to 1 month's fees. ``` ### Template: Termination for Cause ``` Termination for Cause: Either party may terminate immediately upon written notice if the other party: (a) materially breaches this Agreement and fails to cure within 15 days; (b) becomes insolvent or files for bankruptcy; or (c) engages in illegal conduct related to this Agreement. ``` --- ## Intellectual Property Templates ### Template: Limited Assignment **Problematic**: "All work belongs to Company" **Balanced Version**: ``` Intellectual Property: Vendor assigns to Client all rights, title, and interest in the Deliverables specifically created for Client under this Agreement. Vendor retains all rights to: (a) pre-existing materials; (b) general methodologies and know-how; and (c) work product created for other clients. ``` **Protective Version (for creator)**: ``` Intellectual Property: Upon full payment, Vendor grants Client a perpetual, worldwide license to use the Deliverables for Client's internal business purposes. Vendor retains all ownership rights and may use general concepts and methodologies developed in connection with this project. ``` ### Template: Work-for-Hire with Limitations ``` Work Product: The Deliverables shall be considered work-made-for-hire for Client. To the extent any Deliverables do not qualify as work-made-for-hire, Vendor hereby assigns all rights to Client. Vendor retains no rights to use Deliverables except as necessary to perform services under this Agreement. ``` --- ## Confidentiality Templates ### Template: Reasonable Confidentiality **Problematic**: "All information is confidential forever" **Balanced Version**: ``` Confidentiality: Each party agrees to hold the other party's Confidential Information in confidence for 3 years from disclosure. "Confidential Information" means information marked as confidential or reasonably understood to be confidential given its nature. Obligations do not apply to information that: (a) is publicly available; (b) was known prior to disclosure; or (c) is independently developed. ``` **Protective Version**: ``` Confidentiality: Recipient shall protect Discloser's Confidential Information using at least the same degree of care used for its own confidential information, but no less than reasonable care. Confidentiality obligations survive for 5 years or, for trade secrets, indefinitely. Recipient shall return or destroy all Confidential Information within 10 days of termination. ``` --- ## Liability Templates ### Template: Mutual Liability Cap **Problematic**: "No liability" or "Unlimited liability" **Balanced Version**: ``` Limitation of Liability: Except for breaches of confidentiality or indemnification obligations, each party's total liability shall not exceed the total amount paid or payable under this Agreement in the 12 months preceding the claim. Neither party shall be liable for indirect, incidental, or consequential damages. ``` **Protective Version (for service provider)**: ``` Limitation of Liability: Company's total liability shall not exceed the fees paid by Client for the specific services giving rise to the claim. Company shall not be liable for: lost profits, business interruption, or consequential damages. Client's sole remedy for service issues is re-performance or refund of fees paid for deficient services. ``` --- ## Indemnification Templates ### Template: Mutual Indemnification **Problematic**: "You must protect us from everything" **Balanced Version**: ``` Indemnification: Each party shall indemnify the other against third-party claims arising from: (a) breach of this Agreement; (b) negligence or willful misconduct; or (c) violation of applicable law. Indemnification excludes claims caused by the indemnified party's own negligence or breach. ``` **Narrow Version**: ``` Indemnification: Vendor shall indemnify Client against third-party claims that the Deliverables infringe intellectual property rights, provided Client: (a) promptly notifies Vendor; (b) allows Vendor to control defense; and (c) reasonably cooperates. Vendor's sole obligation for infringing Deliverables is to modify, replace, or refund fees. ``` --- ## Dispute Resolution Templates ### Template: Escalation Process ``` Dispute Resolution: The parties shall first attempt to resolve disputes informally through good-faith negotiation for 30 days. If unresolved, disputes shall be submitted to non-binding mediation. If mediation fails, either party may pursue litigation in the state or federal courts located in [Jurisdiction]. ``` ### Template: Arbitration Clause ``` Arbitration: Any dispute shall be resolved by binding arbitration under the rules of the American Arbitration Association. Arbitration shall occur in [City, State]. Each party bears its own costs. The arbitrator's decision is final and enforceable in any court. ``` --- ## General Provisions Templates ### Template: Assignment **Problematic**: "Cannot assign without consent" **Balanced Version**: ``` Assignment: Neither party may assign this Agreement without prior written consent, except that either party may assign to an affiliate or in connection with a merger, acquisition, or sale of substantially all assets. Notice of assignment must be provided within 10 days. ``` ### Template: Force Majeure ``` Force Majeure: Neither party shall be liable for delays caused by events beyond reasonable control, including: acts of God, war, terrorism, labor strikes, or government actions. The affected party shall notify the other within 5 days and make reasonable efforts to resume performance. Either party may terminate if force majeure continues for 30 days. ``` ### Template: Governing Law ``` Governing Law: This Agreement shall be governed by the laws of [State], without regard to conflict of law principles. Venue for any dispute shall be in the state or federal courts located in [City, State]. ``` --- ## Redrafting Principles ### 1. Be Specific - Replace vague terms with concrete definitions - Add examples where helpful - Define key terms in a definitions section ### 2. Be Balanced - Ensure obligations flow both ways - Avoid one-sided provisions - Consider the other party's perspective ### 3. Be Clear - Use active voice - Keep sentences reasonably short - Avoid unnecessary legalese - Number or letter lists for complex provisions ### 4. Be Complete - Address "what if" scenarios - Include cure periods for breaches - Define consequences of non-performance - Specify notice requirements ### 5. Be Reasonable - Avoid extreme positions - Include proportionality (e.g., termination fees should reflect actual harm) - Consider industry standards - Ensure provisions are likely enforceable --- ## Usage Notes These templates are starting points only. Always: - Adapt to your specific situation - Ensure consistency with other agreement provisions - Have important contracts reviewed by qualified counsel - Consider local law requirements **Disclaimer**: These templates do not constitute legal advice.