The Principles of Business Contract Drafting

1
The Principles of Business Contract Drafting

• FHUI, Second Semester 2012
• 4 September 2012
• Arief Surowidjojo

2
Historical Purposes of Business Contract Drafting

• Rules of business transactions are complied in
  written and even codified laws, court precedence,
  bilateral and multilateral agreements,
  international conventions, rules adopted by
  commerce organizations, written best practices,
  and others, depending on the legal system adopted
  by a country
• Regardless how rigorous all such rules are
  defined, written, made applicable and enforced,
  business transactions are developed following
  changes in the laws, regulations, public
  policies, court precedence, politics, types of
  transaction, positioning of the parties, form of
  business organizations, moral and ethics, and
  influence from civil society and stakeholders,
  advancement in technology, market requirements,
  etc
• Business sectors require meticulous protection
  due to the gap created by the fast-moving
  business practices and available legal tools and
  back-ups

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Historical Purposes of Business Contract Drafting

• Business sectors require comprehensive and strong
  protection due to the gap created by the
  fast-moving business practices and available
  legal tools and back-ups
• The protection required by business sectors needs
  to be obtained in the forms of effective and
  enforceable exchange of intent and communication,
  agreements, supporting documents, media strategy,
  public communication, government supports,
  stakeholders supports, changes in laws,
  regulations and government policies, and in any
  other forms universally recognized

4
Catching up with the new trend

• The new business models, forms of cooperation,
  models of corporations, intervention of states in
  business sectors, geo-politics, and new best
  practices require more adjustments in the way
  people do business
• Economic/monetary crisis, restructuring/reorganiza
  tion, and how the world reacts against the
  destruction in society, morals and ethics
  complicate also rapid changes in the way people
  do business
• Environmental destruction, global warming, food
  scarcity, lack of energy supplies, lack of
  capitals, and new technology, corruption and bad
  governance add to the adjustments to be made to
  positioning of people, corporations and states

5
Catching up with the new trend What needs to be
done by the business sectors

• Mapping the region, country and corporate
  positioning
• Mapping the market whose market is it now
• Financing availability
• Resources availability natural resources, human
  resources, technology, infra structure, and
  legal, political, and social systems
• Increasing governance level to world class
• Ability to manage the process
• Success rate in delivering the results

6
Catching up with the new trend What needs to be
done by the business sectors

• Sample of new approach to contract drafting
• A state-owned mining company that operates in
  Central Kalimantan holds several coal mining
  licenses issued by the Central and Local
  Governments. The coals, due to local geographic
  conditions, could only be transported to the
  nearest ports only 8 months in a year. Some of
  the licenses are threatened to be revoked by the
  Local Government due to lack of capacity in
  commencing all mines at once. The Mines overlap
  with protected forests. The banking industry in
  the developed countries have started limiting
  their financial facilities due to European
  crisis. The Japanese markets, being its
  traditional markets, started to buy the same
  products from Latin Americas. The company is
  designed to produce electricity to business and
  public in Central Kalimantan. The Bupati who
  issued the mining licenses is being indicted by
  KPK.

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Catching up with the new trend