Achieving a faster contract exchange while minimising legal expenses is ideal for all parties involved. Our commercial property team detail ways this can be achieved below.

Strategies for expediting contract exchange

One of the most significant factors contributing to delays in contract exchange is the timing of legal involvement. Often, negotiations regarding key terms occur only after lawyers have been instructed, leading to prolonged discussions and revisions.

The importance of clear initial terms

While formal Heads of Terms are not always necessary, having a well-defined and agreed-upon set of terms in writing from the outset can streamline the process significantly. These terms should be marked "Subject to Contract" and, where possible, formulated with the assistance of experienced agents or surveyors. Legal professionals can also provide valuable input at this stage, ensuring that potential issues are addressed early, thereby reducing the need for protracted negotiations later.

How this impacts the legal process

Once legal representatives are instructed, an initial draft contract must be prepared. If the agreed terms are unclear, the drafting lawyer may naturally structure the document favouring their client. When the other party's solicitor reviews the draft, discrepancies often arise, leading to further negotiations.

In many cases, a seemingly minor term may evolve into multiple paragraphs of detailed drafting. The opposing solicitor, upon review, may amend or remove specific clauses, replacing them with provisions more favourable to their client. This back-and-forth exchange can result in numerous revisions, extending the timeline and creating frustration for all parties.

The effect on legal fees

Even in cases where legal fees are fixed, inefficiencies in the negotiation process ultimately impact costs. A streamlined process in which lawyers are engaged as strategic partners and work with clients to implement clearly defined terms enables legal professionals to provide more cost-effective services.

Legal teams can structure their pricing accordingly for clients who regularly engage in transactions with well-established terms from the outset, ensuring a more predictable and efficient service. Conversely, where lawyers are frequently required to resolve unclear terms post-instruction, pricing structures must reflect the additional time and complexity involved.

By fostering a collaborative approach and ensuring clarity at the initial stages, businesses can achieve faster contract exchanges while optimising their legal expenditure.