Trade

Drafting and negotiating contracts are key elements of business life.

Regardless of the specificities of each field, there are a number of key points that need to be rigorously analyzed in order to safeguard your company's interests.

MOSAIK will work with you to determine the best structure for your business.There is no legal form that is more advantageous than another, and the choice will depend on a number of parameters that need to be determined in advance:

This common base often includes the following points:

• The amount of the contract determines the economics of the operation
• Settlement terms enable you to anticipate payment deadlines, to manage your financial flows as effectively as possible, and to secure the parties' commitments in a practical way. On the supplier's or service provider's side, this is a crucial point, because depending on the timing of payment, you may be obliged to advance sums in order to be able to perform the contract. What's more, agreeing to be paid in full on the final due date of the contract means taking the risk of seeing the customer unable to honor his debts when the time comes. On the customer's side, paying in advance means running the risk of the service provider disappearing with the money received, without having supplied the goods or services.
• The length of the commitment period , or the exit conditions, indirectly determine the economics of the transaction. It can be an effective negotiating lever, since a long commitment period often leads to better contractual terms.
• The applicable law and the competent jurisdictions allow you to find out the legal and jurisprudential rules governing your contract. Depending on the applicable law, the economy of the contract may take on a different proportion. A contract governed by American law, for example, is likely to be punished by punitive damages (an amount intended to punish you in excess of the prejudice suffered by the other party), which is not the case with a French contract, which is subject to the principle of compensation only for the prejudice suffered. Damages of this kind can increase tenfold, or even more, the financial penalties incurred in the event of legal action, and thus considerably increase the risk of litigation.

However, there are other points which may seem more anecdotal, but which are essential to ensure that the contract is properly executed and, above all, that it is fully effective.

Sanctions for breach of contract, for example, provide effective and dissuasive tools. Indeed, the sanctions provided for by law and jurisprudence are sometimes insufficient or not very dissuasive (limitation of the prejudice suffered, absence or very weak consideration of indirect prejudices such as prejudice to image or reputation, etc.).

MOSAIK will work with you to determine the most protective solution to meet your needs.

This can take the form of a penalty clause (a pre-agreed financial penalty for misconduct on the part of the other party), penalty payments for each day of delay and/or each infringement (an amount to be paid for each period that the obligation remains unfulfilled, or for each infringement each time it is repeated), automatic assumption of certain expenses, or the introduction of compensation mechanisms (withholding of payment, granting of additional time, etc.).

Limitation of liability clauses, on the other hand, make it possible to control the financial risk and anticipate in advance the cost in the event of non-performance of the contract. However, such clauses must not provide for too low an amount, otherwise they may be annulled by the courts.

MOSAIK can help you to set the most appropriate amounts in the light of the economics of the contract.

MOSAIK can also help you prevent difficulties or identify your partners' shortcomings by setting up contractual monitoring mechanisms. For example, the contract may provide for periodic reporting or a mechanism for monitoring the progress of services. These mechanisms should not be overlooked, as they enable you to identify the first breaches as early as possible, and to work in cooperation with your co-contractors to resolve them and prevent them from becoming too serious. They can also provide you with a means of alerting you to avoid aggravating any future damage (for example, by monitoring the progress of a project in detail, you can find out whether the initial schedule can be kept to).

In the same way, MOSAIK can take into account the difficulties of determining the economics of a contract, and can provide you with evolving economic price mechanisms.

MOSAIK can assist you in drafting indexation clauses based on INSEE or SYNTEC indices, review clauses or progressive or degressive performance clauses.

These elements should enable us to best meet your expressed needs.