The Contract’s Greatest Risk May Be What Is Unwritten

The Greatest Risk in a Contract May Be What Is Unwritten

When reviewing contracts, attention usually focuses on the existing provisions:

Is the term fair?
Is the obligation clear?
Is the penalty proportionate?
And does the wording protect the party we represent?

But with extensive contract work, I have found that the risk is not always in a bad clause.

Sometimes, it lies in the absence of a clause altogether.

What happens if the required approval is delayed?
Who bears the obligations during the transitional period?
What if part of the transaction is completed but the rest cannot be?
And who returns the amounts or guarantees if the relationship ends before completion?

These questions often do not appear important at the time of signing, because everyone expects the relationship to succeed.

But a contract is truly tested when something happens that no one wanted to happen.

That is why, when reading any agreement, I do not ask only:

What does the contract say?

I also ask:

What important question has it left unanswered?

A bad clause can be noticed and negotiated.

A contractual gap, however, may not reveal its danger until a dispute fills it.

In contracts, the sentence left unwritten may be more dangerous than entire pages drafted with care.

— Omar Al-Baghdadi