In commercial deals, contracts underpin everything from property sales to shareholder exits – shaping outcomes and mitigating risk, and can be the difference between a smooth exit or a legal crisis. Miss a clause, and you may be betting your business on a technicality. PJ Veldhuizen, MD of specialist commercial law firm Gillan & Veldhuizen Inc, unpacks some of the essential contract clauses your commercial agreement might be missing.
The Survival Clause: Protection Beyond Termination
An often-overlooked clause is the Survival Clause. This clause specifies which provisions of a contract remain enforceable even after termination – and can be the deciding factor between a drawn-out court battle and a faster, more cost-effective resolution through alternative dispute resolution provisions in the agreement. “Without a survival clause, key protections like confidentiality, indemnities or the obligation to resolve disputes through mediation and / or arbitration could fall away the moment the contract is terminated,” cautions Veldhuizen.
The Shifren Clause: Locking in Written Terms
Veldhuizen also emphasises the value of the Shifren Clause – a contractual provision that locks in the written terms of the agreement and requires that any changes be made in writing and signed by all parties. “It essentially prevents one party from later claiming the deal was amended verbally,” he explains. Without it, you’re wide open to disputes based on alleged side deals or casual conversations. “Suddenly you’re arguing over whether your napkin contract also included the 25 parking bays on level 2,” he adds.
Other Essential Contract Clauses That Safeguard Your Deal
Prevents parties from relying on verbal promises or informal assurances not captured in the written contract.
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Independent Legal Advice Clause
Confirms each party had a fair chance to seek legal counsel, helping to prevent later claims of coercion or misunderstanding.
Ideal for joint ventures or co-owned businesses, this clause allows one party to set a price and the other must either buy or sell at that amount. It prevents deadlocks – but only works when the clause is clearly and carefully drafted.
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Dispute Resolution Clauses
By specifying mediation, adjudication, expert determination and / or arbitration, these clauses can help parties avoid litigation entirely, saving you money, time, and often preserving valuable business relationships.
For business owners, the message is clear: a well-drafted contract doesn’t just document a deal – it defends it. “Although they can be helpful, rather stay clear of generic templates, DIY and AI contracts that can cost you far more than a legal fee,” warns Veldhuizen. “A professionally drawn up contract is your strategy, your shield – and often your best line of defence when something goes wrong.”
