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Entrepreneurship Law Clinic

What Are Precedents?

In a transactional context, precedents are forms or documents that have been used in previous transactions. They are sometimes also referred to as standard clauses. Using precedents can significantly simplify the drafting process. They provide an example of language that has been used in similar situations, so that each new document does not need to be drafted from scratch. They can also serve as a useful checklist to ensure that the document you are creating includes all the necessary provisions and covers all the anticipated contingencies. It is often useful to find and compare multiple precedents for similar provisions to familiarize yourself with the language that is commonly used and to discern what language may be subject to negotiation. 

It is very important to thoroughly review any precedent documents you are using to ensure that they accurately reflect your intended meaning and the facts of your particular situation.