LR-301c · Module 1

Drafting Commercially Viable Language

3 min read

Language that protects you perfectly but is commercially unacceptable to the other party is not a solution — it is a deal blocker. Commercially viable redlines protect your interests while acknowledging the other party's legitimate business needs. The indemnification cap that is proportional to contract value. The termination clause that gives both parties reasonable exit options. The IP provision that allocates rights based on who created what.

Do This

  • Draft redlines that address the risk without shifting disproportionate burden to the other party — mutual provisions are more likely to be accepted
  • Reference industry standards and market norms in your explanations — "this cap is consistent with standard MSA practice" is more persuasive than "we want this cap"
  • Consider the other party's business model when drafting — a provision that is reasonable for an enterprise may be unacceptable for a startup

Avoid This

  • Draft redlines that transfer all risk to the other party — one-sided provisions are rejected and damage the negotiation relationship
  • Use aggressive legal language designed to intimidate — intimidation produces resistance, not agreement
  • Ignore the deal economics — a redline that protects against a $50K risk but blocks a $5M deal is not commercially rational. [CLEARED]: Risk protection must be proportional to deal value.