Review all state law related to contract construction and how default clauses are generally construed in your jurisdiction. Knowing the intricacies of contract law is a very daunting task so you may wish to consult an attorney to help you draft the contract.
Consider how your performance on the agreement or how the project you are working on will be affected if the other party breaches the contract. Make a list of potential reasons the other party might breach or potential delays which would be detrimental to the project.
Create a list of potential remedies to the other party's breach of contract. Common remedies include monetary damages, specific performance and the right to bring someone else in to complete the project or agreement.
Draft the contract default clause stating explicit actions which govern when the other party will have defaulted on the contract. Be sure to also include what remedies will be available to the aggrieved party when the other party defaults.
Consider adding a liquidated damages clause to your default clause which will give the non-defaulting party specific monetary relief on top of the other relief granted in the default clause.
- Expert Law: Common Contract Clauses; Aaron Larson; December 2010
- Bankrate: Universal Default Rules Explained: Bill Burt
- Personal Financial Network: What is a Universal Default Clause?
- Watson and Associates: Termination For Convenience & Default
- American Bar Association: Learning How to Draft Contracts in the Real World
- Googobits.com: How to Successfully Write and Negotiate a Contract ; Robbi Erikson; September 2005
- United States Government: Sample Contract Termination for Default
- The Florida Bar Association: Be Careful Using Form Real Estate Contracts
- Irmi.com: Liquidated Damages Clause and Waiver of Consequential Damages
- San Diego Home Finder: Understanding Liquidated Damages
- Cohen, Seglias, Pallas, Greenhall and Furman: Termination for Default - Clause
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