Contract Drafting – The Path To Best Practice

Contracts form the bedrock of numerous industries, including the Oil & Energy Industry, where I am an independent petroleum landman or land manager. The successful execution of geological and geophysical probing, Front-End Engineering Design (FEED) studies, marketing initiatives, funding measures, exploration, and transportation of oil and gas, among other industry components, all depend on the terms outlined in a contract.

This article is the inaugural piece of a series that aims to elucidate the contract drafting process. In the upcoming articles, we will delve into the various players involved, underpin the necessity for collaboration, dissect the anatomy of the contract, and showcase some emergent technology designed to streamline contract drafting.

The contract drafting process demands the input of at least two parties. This procedure could range from being straightforward, with one party crafting the contract and the other acceding to it, to being intricate — dictating numerous iterations and relentless negotiations between parties and their teams over the interpretation of critical terms and inclusion or exclusion of key provisions. This highlights the importance of retaining a contract drafting lawyer adept at eschewing technicalities that could influence contractual obligations and agreements.

Despite variances across industries, common elements of contract drafting include:

A crucial, often overlooked, aspect is:

The support team refers to the non-contracting parties who aid in shaping the contract. Picture a culinary team composed of chefs and sous chefs preparing a meal for a panel of judges. Every team member contributes to crafting the meal, regardless of their role or position within the hierarchy.

Beyond their skills and expertise, these professionals bring collective strength to the contract drafting process, allowing for a more thorough and balanced agreement. By collectively analyzing, negotiating, and drafting the contract, they can ensure that all angles are covered and potential issues are addressed. A complex and often daunting process can become more manageable, efficient, and ultimately successful through this collaborative effort.

As a liability barrier for the client, an attorney holds the onus of creating the contract while considering current statutes and case law, including contract law, to avoid invalid or burdensome provisions. Should they make errors while drafting, attorneys typically possess liability or errors and omissions insurance, providing additional protection for their clients. Beyond the framed degree on the wall and insurance coverage, an attorney's most valuable asset to contract drafting is their intricate understanding of legal systems, processes, and jargon.

Paralegals provide indispensable assistance to attorneys by dovetailing their skills and expertise. They serve as a second brain on legal matters, driving efficiency and cultivating best practices. Their firm grasp of legal procedures and legalese offers them an advantage during contract draft reviews and approval processes. The perspective of a paralegal during the contract drafting phase ensures meticulousness and efficiency in the final draft.

Unique to the energy industry, land managers co-plan projects with the client. Drafting a contract from a land manager's perspective involves understanding the client's goals and ensuring the necessary queries are asked, and the proper provisions are reviewed before finalizing the contract.

Contract drafting is a core pillar for businesses around the world. Crucial for all plans and operations, support teams consisting of attorneys, paralegals, and land managers, with their specific skills, bring a valuable perspective to contract drafting within industries like oil and energy. Recognizing and leveraging these professionals can catalyze the creation of robust contracts, safeguarding and propelling your business toward its strategic objectives.