Commercial Contract Review in Georgia: Key Clauses

Describe exactly what is delivered, in what condition, and who signs the acceptance record. If inspection or testing is necessary, define the method, timing and consequences of objections.

Specify milestones, invoicing, taxes, advance payments, security mechanisms and any permitted deductions. Avoid contradicting annexes or formulas that do not add up.

Define how notices are sent, whether cure periods apply, and which events may justify an extension. Assess penalties, limits of liability and force majeure in the context of the transaction and applicable law.

Identify termination triggers, consequences for completed work, access to information, governing law and the court or arbitral forum. Cross-border contracts require particular attention to the enforceability of the selected arrangements.

A brief statement of scope offers little protection if the parties disagree on completed performance. Specify objective acceptance criteria, the evidence of completion, the period for objections and the effect of a disputed acceptance certificate. In works, service and supply contracts an undefined “accepted” can produce litigation over payment versus defects.

Read the pricing table together with advance recovery, contractual penalties, caps on liability, suspension rights and termination. Some breaches call for an opportunity to cure, but one formula will not fit every obligation. Distinguish principal debt, security, provable loss and contractual penalties, and avoid double counting the same loss.

An enforceable contract should allow an independent reader to determine what was promised, when performance became due and what evidence demonstrates acceptance or breach. For services or construction, distinguish milestones and interim certificates from final acceptance and expiry of defect obligations. For goods, specify quantity, quality standard, inspection rights and the consequences of a latent defect. Make the notice procedure operational—who receives it, by which address, and when delivery is deemed effective. If a penalty is specified, define the calculation base and any cap; a formula referring to the entire contract price may have very different consequences from one tied to the delayed portion. Termination provisions should address cure opportunities and settlement of advance payments, retention and completed works.

A supplier regards software as delivered because code was handed over; the customer withholds payment because agreed features do not work. A well-drafted contract would specify test cases, review periods, defect categories and the effect of an acceptance certificate. Delay, defective performance and total non-performance raise different legal issues; one generic penalty or termination clause may not deal with them adequately.