Preparation: Overview, definition, and example
What is preparation?
Preparation in a contractual context refers to the actions, steps, or requirements that a party must complete before fulfilling its obligations under the agreement. It ensures that all necessary conditions, resources, or approvals are in place before the performance of the contract begins.
For example, in a construction contract, the contractor may be required to complete site surveys, obtain permits, and prepare materials before starting work. Similarly, in a supply agreement, a vendor might need to secure raw materials before manufacturing the ordered products.
Why is preparation important?
Preparation is essential for ensuring that contractual obligations can be performed efficiently and without delays. It helps establish clear expectations, prevents misunderstandings, and reduces the risk of non-compliance or breach of contract.
For businesses, preparation clauses provide accountability by specifying what must be done before the main obligations take effect. This helps avoid disputes and ensures smooth project execution.
Understanding preparation through an example
Imagine a catering company contracted to provide food for a corporate event. The contract includes a preparation clause requiring the company to finalize the menu, order ingredients, and set up the event space at least 24 hours in advance. This ensures that everything is ready before the event starts.
In another scenario, a software development company agrees to create a custom application for a client. The contract states that the client must provide all necessary data, branding materials, and project specifications before development begins. This preparation requirement ensures that the project runs smoothly without delays.
An example of a preparation clause
Here’s how a preparation clause might appear in a contract:
“Each Party shall complete all necessary preparations, including obtaining required approvals, securing materials, and fulfilling preconditions, before commencing performance under this Agreement. Failure to complete such preparations may result in delays for which the responsible Party shall be liable.”
Conclusion
Preparation clauses help ensure that all necessary steps are taken before contract performance begins, reducing risks and preventing delays. They provide a clear framework for what must be done in advance, improving efficiency and accountability.
By including a preparation clause in contracts, businesses can establish structured timelines, ensure readiness, and minimize potential disruptions in executing contractual obligations.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.