Contracts
Contracts are the backbone of your business. We don't just review and draft contracts: we design them strategically, with business knowledge to protect your interests, minimize risks and facilitate your expansion.
How we approach Contracts
- →Agile review with predefined SLAs
- →Standardization for predictability and management
- →Support in critical commercial negotiations
- →Strategic vision: each contract evaluated by business impact
- →Ongoing support in contract administration and management
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Key services of our commercial contracts practice
Drafting and review of commercial contracts (services, distribution, VAR, licensing)
The quality of your commercial contracts determines how much time and money you lose when something goes wrong. We draft and review contracts for companies in Chile covering the most common B2B types: master service agreements for professional and technical services, exclusive or non-exclusive distribution agreements with territory and minimum-purchase clauses, VAR (Value Added Reseller) agreements with tiered licensing and solution integration, software, trademark and know-how licensing, outsourcing agreements and SLAs, agency and representation contracts, and manufacturing, supply and toll-processing agreements.
Each model is built around the client's negotiating position, sector regulatory risk, governing law and jurisdiction, warranties and limitation of liability, and exit mechanisms. We deliver reusable templates, standard-clause glossaries and user manuals so the commercial team can reuse them without losing legal consistency. The goal is not to produce a perfect contract but a contract that holds up to real-world operations.
Negotiating NDAs, MOUs and term sheets
Preliminary agreements —NDAs, MOUs, LOIs and term sheets— are the first line of defense in any significant commercial negotiation. A poorly drafted NDA leaves critical information exposed; an ambiguous MOU creates implicit obligations that can block future deals; an imprecise term sheet conditions the final terms in ways the business does not anticipate.
We advise on drafting and negotiating mutual and unilateral NDAs with term, exclusion, return-of-information and penalty clauses; MOUs and letters of intent with clear definition of binding versus non-binding character; and term sheets for investment, M&A, joint ventures and strategic alliances with exclusivity, non-solicitation, transaction-cost and governing-law clauses. We support negotiation rounds with live redlines, open-issue lists and position memos. The goal is for the preliminary document to faithfully reflect the deal, with no surprises in the transition to the definitive contract.
Implementing an internal contract approval policy
A contract approval policy turns a chaotic operation into a predictable, auditable process. We design policies that define who can negotiate, who can approve and who can sign based on contract type, amount, risk and jurisdiction. The policy includes approval matrices with segregation of duties, standardized templates for common contract types, lists of critical and prohibited clauses, documented exception processes, maximum review timelines, integration with CLM (Contract Lifecycle Management) tools and centralized archiving with metadata.
We include a roll-out plan: training for the commercial, finance, operations and procurement teams, user manuals and an internal FAQ. The policy is supported by management KPIs —average closing time, exception rate, expired contracts, most-negotiated clauses—. A company with a well-implemented policy closes contracts faster, with less risk and with traceability for internal audits, M&A due diligence and ISO certifications.
Contract portfolio audit and risk mapping
Most growing companies do not actually know what they have signed. A contract portfolio audit reveals which contracts are active, expired, approaching automatic renewal, lacking warranties, carrying disproportionate penalty clauses, sitting under unfavorable jurisdictions, or containing non-compete clauses that limit future operations.
We run audits designed for companies with portfolios of 50 to 500 contracts: inventory and classification, critical reading against a risk grid (financial, regulatory, reputational, operational), detection of inconsistent standard clauses across similar contracts, mapping of mutual obligations, critical dates and pending commitments, and an executive report to the board with prioritized recommendations. The audit is the foundation for deciding what to renegotiate, terminate, standardize under template or digitize under CLM. It is also a prerequisite for M&A processes, capital raising and compliance certifications.
Out-of-court resolution of contractual disputes
Contract disputes that are not resolved quickly escalate in cost and exposure. We favor out-of-court resolution whenever it is consistent with the client's position: well-grounded breach notices that open the cure period without closing procedural options, mediation before institutional centers (CAM Santiago, ICC, CIAC) when there is a commercial relationship worth preserving, arbitration when the contract provides for it and timelines allow, and direct negotiation when there is commercial room to maneuver.
We advise on choosing the right forum based on the contract, the counterparty's jurisdiction and the amount in dispute. We support each stage with cost-benefit analysis, procedural scenarios and time projections. When negotiation stalls, we prepare the transition to court or formal arbitration without losing accumulated procedural advantages. Resolving a contract dispute well is not just about recovering money: it is about preserving the commercial relationship when it is worth keeping and closing it cleanly when it is not.
Frequently asked questions on commercial contracts
Which clauses are critical in a Chilean commercial contract?
The most critical clauses in a commercial contract under Chilean law are: well-defined object and scope (what is done, what is not, exclusions), price and payment terms with adjustments and late-payment interest, term and renewal or termination mechanisms, warranties and limitation of liability (including indirect damages and lost profits), confidentiality, intellectual property over deliverables, non-compete and non-solicitation with proportionate term and territory, assignment and subcontracting, force majeure with a modern definition covering pandemic and regulatory events, governing law and jurisdiction or arbitration. Omitting any of these clauses or drafting them generically increases litigation risk. Quality is not about adding more clauses but about drafting them with precision and internal coherence.
When is an MOU preferable to a definitive contract?
An MOU (Memorandum of Understanding) or letter of intent is preferable when the parties have agreed on the economic principles but still need to define operational, regulatory or due-diligence aspects, or when the deal needs to be documented publicly or internally before the definitive contract is closed. The MOU sets exclusivity of negotiation, deadlines, responsible parties, transaction costs and basic economic terms. It is critical to expressly state which clauses are binding (typically confidentiality, exclusivity and costs) and which are not (price, operational terms), since a poorly drafted MOU can be interpreted by courts as a definitive contract. For complex, multi-disciplinary or regulator-approved deals, the MOU is the right instrument.
Which clauses are typically void or challenged in Chilean courts?
Chilean courts often void or limit clauses that violate public-policy rules or non-waivable rights. Among the most challenged are: non-compete clauses excessive in duration or territory, limitations of liability for willful misconduct or gross negligence (always void), penalty clauses manifestly disproportionate to the breach, advance waivers of consumer or worker rights, abusive clauses in adhesion contracts, jurisdiction clauses that prejudice the consumer, requirements of excessive prepayments and total exclusion of statutory warranties in sale contracts. To reduce risk, clauses must be proportionate, mutual where appropriate and drafted with awareness of applicable case law and consumer- and worker-protection rules.
How is a commercial contract terminated early?
Early termination of a commercial contract follows three main paths: termination by mutual agreement, documented through a release and liquidation of pending obligations; unilateral termination on an expressly agreed ground (material breach, change of control, insolvency, prolonged force majeure) executed via reasoned notice and respecting any cure period; or judicial or arbitral resolution when the ground itself is disputed. Before terminating, it is critical to review prior-notice clauses, penalties, refund of advance payments, intellectual property developed and surviving obligations (confidentiality, non-compete, indemnity). A poorly executed termination can turn the terminating company into the defendant in a breach claim. We advise on strategy and documentation to minimize exposure.
What does a contract portfolio audit include?
A contract portfolio audit includes: a complete inventory of active contracts classified by type, counterparty, geography and amount; analysis of critical clauses (jurisdiction, governing law, termination, non-compete, warranties, intellectual property); identification of relevant dates (expirations, automatic renewals, payment milestones, pending deliverables); detection of inconsistencies among similar contracts and of misapplied standard clauses; risk mapping ranked by probability and impact (financial, regulatory, operational, reputational); prioritized recommendations to renegotiate, terminate, standardize under template or digitize under CLM; and an executive report to the board. The audit is the foundation for M&A due diligence, capital raising, ISO certifications and digital-transformation processes within the legal function.
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