📄 Essential clauses that every contract must include
Miguel Urquijo
In the business world, contracts don't just formalize agreements: they are legal tools that prevent conflicts, protect interests, and provide security to business relationships . However, it's common to find contracts that are poorly structured, incomplete, or based on generic templates that don't reflect the reality of the business or comply with legal requirements.
In this article, we explain the essential clauses that every commercial contract must include , why they are important, and how to ensure they are drafted correctly.
⚖️ Why is it crucial to review the contractual structure?
A poorly written contract can backfire on the company itself. A lack of clarity, the omission of key terms, or the use of ambiguous language can make the agreement difficult to enforce, lead to conflicting interpretations, or even invalidate the contract .
Having well-designed clauses is not only a responsible legal practice, but a prevention strategy that saves litigation, protects assets, and consolidates healthy business relationships .
🧾 The 10 key clauses that should not be missing from a commercial contract
Below, we detail the key clauses that must be included in virtually every contract between companies or legal entities:
1. Identification of the parties
The parties involved in the contract must be clearly specified, including their full name or company name, tax identification number, address, and authorized legal representative.
2. Purpose of the contract
Define precisely what is agreed upon: what service will be provided, what good will be delivered, or what activity will be performed. A poorly defined purpose can invalidate the contract.
3. Obligations and responsibilities
The specific obligations of each party, the execution times, and the conditions under which the service will be provided or the product delivered must be established.
4. Value, form and payment term
Include the agreed amount, whether it's subject to VAT or other withholdings, the payment method (transfer, cash, check), and due dates. Avoid ambiguities that could lead to noncompliance.
5. Duration and termination
It must establish whether the contract is for a fixed or indefinite period, as well as the legal and contractual reasons for terminating it early.
6. Confidentiality
Essential clause when exchanging sensitive information, know-how, commercial data, strategies or other protectable intangible assets.
7. Intellectual property
Essential if the contract involves content creation, designs, software, or creative processes. It must define who retains the rights and under what conditions.
8. Non-compliance and penalties
It establishes the legal consequences of non-compliance, compensation, penalty clauses, and contractual liabilities. This is key to ensuring the execution of the contract.
9. Dispute resolution
Define the mechanism for resolving conflicts: conciliation, amicable settlement, arbitration, or judicial process. The jurisdiction and applicable law must also be indicated.
10. Other specific clauses
Depending on the contract, clauses may include exclusivity, non-competition, assignment, automatic renewal, force majeure, and others.
🧠 Drafting is not copying: each contract must be adapted to the case
One of the most common mistakes is using standard templates or copying third-party contracts. This can lead to contradictory clauses, loopholes, or unenforceable conditions.
Each contract must be adapted to the type of legal relationship, the economic sector and the particular interests of the parties.
👨⚖️ Why should you seek legal advice when drafting contracts?
At CGC Abogados, we help companies and entrepreneurs draft and review commercial contracts strategically and in compliance with current regulations. Our services include:
✅ Legal diagnosis of contractual risks
✅ Drafting of customized clauses
✅ Legal review of existing contracts
✅ Support in complex negotiations
✅ Attention from lawyers specializing in corporate law
📲 Do you need to review or draft a commercial contract?
Avoid costly mistakes and protect your company's interests.
Request personalized legal advice today to review your contract before signing it.