Businesses habitually send license agreements, services agreements, and other standard agreements to their legal counsel to review, revise, and explain the risks associated with proposed deals. However, there are several attachments that should be included for review but are routinely left out; orders are among the most important.
Orders can sometimes be an afterthought after the terms and conditions have been painstakingly negotiated. However, it’s important to make sure that orders contain all of the information required by the underlying agreement. When deals go bad, people usually look to the order to determine what was purchased before analyzing what was received. Ensuring that sufficient information is contained in an order can be an easy way to prevent a costly dispute.
Orders should contain basic but complete information. As a rule of thumb, the following should be included in every order:
- The names of entities providing and receiving the products or services
- A reference to the underlying agreement (e.g. an agreement number/name)
- A complete name of each product, or a complete description of each service
- The duration of the order: when does the order start and conclude
- Where the products or services will be delivered
- The prices of each product or service
- The payment terms of the order
- Contact information for the project managers of each party
Sometimes, important information is left out in a rush to get a project started. On the other hand, there is information that should not be in the order. Look for clauses that contradict the underlying terms and conditions of the agreement. Many agreements have conflicts clauses that state that if there is a conflict between the terms and conditions of the agreement and the order, then the order controls. In such case, the time and money a business spends on negotiating an agreement may be undermined by a simple order.
Consulting an attorney to review an order along with the underlying agreement, or at least before executing a deal, can be an easy and cost-effective way to prevent misunderstandings and delay after a project is well underway.