When considering provisions to include in a contract in Oklahoma, most people automatically include the major deal points such as purchase price, inspections, and closing procedures. However, some of the most important protections in any agreement are found at the bottom of the contract. These legal provisions can determine what happens if something goes wrong. Whether you are a business owner in Oklahoma City or entering into a real estate transaction in Oklahoma, including the right clauses can protect your rights and reduce litigation risk.
Here are five essential provisions to include:
Severability
Including a severability clause in your contract ensures that if a court found that one part of your contract is invalid, illegal, void, incapable of being enforced, or against public policy that the other terms and provisions of the contract are thrown out, then a court may throw the entire contract out with it. This clause ensures that if a minor, or non-material, component of the contract is deemed unenforceable then the rest of the deal may continue as the parties intended.
Integration
An integration, also known as an entire agreement, clause shows a court that each of the contracting parties agreed that this written contract is the entire finalized agreement regarding the contract matter. Including this provision prevents another party from attempting to change or include other terms or side agreements in the contract. By including this provision, any outside agreements made prior to or contemporaneously with the written contract are inadmissible to alter the terms of the written contract.
Liquidated Damages
A contract provision providing for liquidated damages, such as a retention of earnest money in a property sale, allows the contracting parties to agree in advance to fair compensation if the other party breaches the contract. This provision protects the parties from high judgments and unnecessary litigation if something goes wrong, limiting the damages the breaching party will have to pay to the agreed-upon amount. However, to be enforceable, liquidated damages must be a reasonable estimate and may not be used to punish the breaching party.
Time is of the Essence
Including a clause in a contract stating that time is of the essence means that failing to perform within the timeframe provided by the contract creates a material breach of the contract. Merely including a date for performance does not make that deadline a material part of the agreement. Including this provision means that missed deadlines would likely entitle the non-breaching party to terminate the contract and receive damages.
Jurisdiction & Venue
Prior to a lawsuit ever being filed, the parties to a contract can agree to take a lawsuit to a specific court. This is especially important if you are dealing with out-of-state or remote parties. Including a provision specifically stating the location where any cases are to be tried can prevent you from having to travel to another city or state to defend or pursue a lawsuit in case controversy between the parties does arise.
Protecting Your Business with Strong Contracts
While no contract provision is entirely failsafe, including these essential clauses can significantly strengthen your legal position when contract disputes arise.
If you are drafting, reviewing, or negotiating a contract in Oklahoma or Oklahoma City, working with an experienced business attorney can help ensure your agreement complies with Oklahoma law and protects your interests.
Written By: Libby Smith, Attorney at Law
Rieger Sadler Joyce LLC | Oklahoma City, OK | Norman, OK
THIS IS MARKETING MATERIAL. THIS IS ONLY GENERAL INFORMATION AND IS NOT TO BE USED AS LEGAL ADVISE OR TO ADDRESS FACT-SPECIFIC LEGAL ISSUES. YOU SHOULD ALWAYS CONSULT AN ATTORNEY DIRECTLY FOR LEGAL ADVICE. WE ASSUME NO LIABILITY AS TO THE USE OF THIS MATERIAL.
