7 Important Clauses to Include in Your Contract

In the Philippines, the governing law refers to the law that governs a particular transaction or relationship. For example, if two parties enter into a contract, the governing law of that contract would be the law that governs its interpretation and enforcement.

The jurisdiction clause, on the other hand, refers to the specific court or tribunal that has jurisdiction over a particular dispute. For example, if a dispute arises under a contract, the jurisdiction clause would specify which court or tribunal has jurisdiction to hear and decide the dispute.

In the Philippines, the jurisdiction of courts is determined by the Rules of Court, which is a set of procedural rules that govern court proceedings. Generally, civil cases are heard by regional trial courts, while criminal cases are heard by regional trial courts or metropolitan trial courts, depending on the gravity of the offense.

It is common practice in the Philippines to include a governing law and jurisdiction clause in contracts to avoid disputes over which law applies and which court has jurisdiction. These clauses are typically negotiated between the parties and are included in the contract as a separate provision.

It is important to note that the governing law and jurisdiction clause must be valid and enforceable under Philippine law. For example, a clause that attempts to exclude liability for fraud or negligence may be deemed invalid under Philippine law. Therefore, it is advisable to seek legal services to ensure that the governing law and jurisdiction clause in a contract is valid and enforceable.

In the context of a contract, the Scope of Work clause outlines the specific tasks, services, or deliverables that one party is required to perform or deliver to the other party. This clause defines the scope of the project or engagement and helps to ensure that both parties are clear on their respective obligations and responsibilities.

The Deliverables clause, on the other hand, specifies the specific outputs or results that are expected from the party responsible for delivering the work. This clause may include a detailed description of the final products, reports, or other deliverables that are required.

Both the Scope of Work and Deliverables clause are important provisions in a contract, as they help to avoid misunderstandings and disputes over the scope and quality of work to be performed. These clauses should be as clear and specific as possible to ensure that the parties have a shared understanding of what is expected.

It is important to note that the Scope of Work and Deliverables clause should be consistent with other provisions in the contract, such as the payment and termination clauses. It is also advisable to include a dispute resolution clause in the contract to provide a mechanism for resolving any disputes that may arise over the scope of work or deliverables.

The Payment Terms Clause is a provision in a contract that specifies the terms and conditions under which one party is required to pay the other party for goods or services provided. This clause typically outlines the payment method, timing, and amount of payments, as well as any penalties or interest for late payments.

The Payment Terms Clause is an important provision in a contract, as it helps to ensure that both parties have a clear understanding of the financial aspects of the agreement. This clause can help to avoid disputes over payment, as it sets out the expectations and obligations of both parties with respect to payment.

The specific terms included in the Payment Terms Clause may vary depending on the nature of the transaction and the preferences of the parties involved. For example, the clause may specify that payments must be made in a particular currency, or that payments will be made in installments over a period of time.

It is important to ensure that the Payment Terms Clause is fair and reasonable to both parties, and that it complies with any applicable laws or regulations. For example, a clause that imposes unreasonable penalties or interest rates for late payments may be deemed unenforceable under certain circumstances.

The Confidentiality Clause is a provision in a contract that outlines the obligations of one or both parties to protect the confidentiality of certain information disclosed during the course of the agreement. This clause may specify the types of information that are considered confidential, as well as the duration and scope of the confidentiality obligations.

The Confidentiality Clause is particularly important in contracts where sensitive or proprietary information may be disclosed, such as in employment contract, non-disclosure agreements, or contracts for the provision of services. By including this clause in the contract, the parties can help to prevent the unauthorized use or disclosure of confidential information, which can help to protect their business interests and maintain the value of the information.

The specific terms included in the Confidentiality Clause may vary depending on the nature of the transaction and the preferences of the parties involved. For example, the clause may specify that confidential information can only be disclosed to certain authorized individuals or that it must be kept in a secure location. The clause may also specify the consequences of a breach of confidentiality, such as termination of the contract or legal action.

It is important to ensure that the Confidentiality Clause is clear and specific, and that it complies with any applicable laws or regulations. For example, the clause may need to include certain language to comply with data protection or privacy laws.

The Termination Clause is a provision in a contract that outlines the circumstances under which one or both parties can terminate the agreement. This clause typically specifies the conditions that must be met for the termination to occur, as well as any notice requirements, penalties, or other consequences of termination.

The Termination Clause is an important provision in a contract, as it helps to clarify the rights and obligations of the parties in the event that the agreement needs to be ended prematurely. This clause can help to prevent misunderstandings or disputes about termination, and can help to ensure that both parties have a clear understanding of the consequences of terminating the agreement.

The specific terms included in the Termination Clause may vary depending on the nature of the transaction and the preferences of the parties involved. For example, the clause may specify that termination can only occur for certain reasons, such as breach of contract, insolvency, or force majeure events. The clause may also specify the notice period required for termination, as well as any penalties or damages that may be imposed in the event of a breach.

It is important to ensure that the Termination Clause is fair and reasonable to both parties, and that it complies with any applicable laws or regulations. For example, the clause may need to comply with laws governing the termination of employment agreements, or with consumer protection laws that require certain notice periods or other protections.

The Intellectual Property Rights (IPR) Clause is a provision in a contract that outlines the ownership, use, and protection of intellectual property rights related to the transaction. This clause is particularly important in contracts where intellectual property is created, licensed, or transferred between the parties.

The IPR Clause typically specifies the ownership of intellectual property rights, as well as any licensing or usage rights granted to the parties. This may include copyrights, trademarks, patents, trade secrets, or other forms of intellectual property. The clause may also specify the obligations of the parties to protect and enforce intellectual property rights, as well as the consequences of any unauthorized use or infringement.

The IPR Clause may also include provisions related to the creation of new intellectual property, such as works of authorship or inventions. For example, the clause may specify that any new intellectual property created during the course of the agreement will be jointly owned by the parties, or that ownership will be determined based on certain criteria.

It is important to ensure that the IPR Clause is clear and specific, and that it complies with any applicable laws or regulations. For example, the clause may need to include certain language to comply with copyright or patent laws, or to ensure that any licensed intellectual property is used in compliance with licensing agreements.

The Force Majeure Clause is a provision in a contract that excuses the parties from performing their obligations under the contract in the event of unforeseeable circumstances beyond their control. These circumstances are often referred to as “acts of God” or “force majeure events.”

The Force Majeure Clause typically includes a list of events that may be considered force majeure events, such as natural disasters, war, terrorism, government actions, or other unforeseeable circumstances. The clause may also specify the obligations of the parties during the force majeure event, such as the requirement to provide notice or take certain steps to mitigate the effects of the event.

In some cases, the Force Majeure Clause may also provide for the termination or modification of the contract in the event that the force majeure event continues for a certain period of time.

It is important to note that the Force Majeure Clause is not a guarantee that the parties will be excused from performing their obligations under the contract. The clause is typically interpreted narrowly, and the party seeking to rely on the clause will need to demonstrate that the force majeure event was the sole cause of their inability to perform.