Key Takeaways

  • A bespoke contract is custom-built for a specific business need or transaction, offering flexibility and tailored risk allocation.
  • Compared to templates or standard forms, bespoke contracts better align with complex or high-value deals.
  • Poorly drafted bespoke contracts may introduce unintended obligations, especially concerning liability and duty of care.
  • Regular legal review of bespoke contracts is critical to ensure enforceability and compliance with evolving laws.
  • Businesses should consider contract lifecycle, stakeholder collaboration, and dispute resolution mechanisms when drafting.

Bespoke contracts are contracts that are tailored to fit the specific requirements of a project. Bespoke contracts are often used when boilerplate or standard form contracts are not suitable. The complexity of the project is one of the main factors that determine which type of contract makes the most sense. For very complex projects, drafting a bespoke contract may be the best way to properly create the desired agreement. Bespoke contracts may also be the best fit for simple supply agreements since standard boilerplate form contracts might include unnecessary terms and may be too inflexible to achieve the desired result.

Non-Standard Bespoke Forms of Contract

While bespoke contracts are useful under certain circumstances, these contracts might not fairly or adequately include sufficient provisions for all possible circumstances. Additionally, there can be many issues with bespoke contracts that are not supported by a history of case law. This is because the specific issues with various terms have not been ruled on by a court of law and may be too ambiguous to accurately accomplish the goals of the contract.  

Bespoke contracts can be time-consuming to create, and disputes regarding the contract's terms are also difficult to defend and costly to bring into court for resolution. For these reasons, you must carefully consider whether to use a bespoke contract or a standard form contract for your agreement.

Key Features of a Bespoke Contract

A bespoke contract is not just any custom document—it is strategically crafted to address the specific needs, risks, and objectives of a unique business arrangement. Core features typically include:

  • Custom Scope and Deliverables: Clearly defines responsibilities, timelines, and project outcomes beyond generic templates.
  • Tailored Risk Allocation: Assigns liabilities and indemnities in alignment with the specific commercial dynamics of the parties involved.
  • Unique Compliance Clauses: Ensures adherence to jurisdiction-specific laws, regulations, and industry standards.
  • Detailed Performance Metrics: Includes benchmarks or KPIs that reflect the realities of the project or transaction.
  • Negotiated Remedies and Termination Rights: Custom clauses for breach, early termination, or renegotiation not found in standard forms.

The Perils of Bespoke Contracts

For engineering projects, the terms in bespoke contracts may be well-intentioned but may also unintentionally increase the duty of care owed by the engineer or team in question beyond the common law standard duty of care. Using a term such as “expert duty of care” or “best practice” can project a higher duty of care on the engineer and adversely determine whether or not the engineer properly performed his duties.

Additionally, bespoke contracts may inadvertently expose engineers to unlimited liability when the terms are silent or unclear on the question of liability. If an engineer agrees to a provision for third-party indemnity, he agrees to compensate his client for any damages caused by himself or any other party involved. As a result, the engineer ends up taking on much more liability for the project than may have been intended.

When a Bespoke Contract Is Essential

While bespoke contracts carry inherent risks, they are indispensable in several situations:

  • Complex Commercial Projects: Involving multiple parties, nuanced risk allocation, or specialized performance obligations.
  • Novel Business Models or Products: Where standard contracts lack relevance or clarity.
  • Cross-Border Transactions: Requiring terms aligned with multiple legal jurisdictions and compliance regimes.
  • Strategic Alliances and Joint Ventures: Where shared control, profit, and governance mechanisms must be negotiated in detail.
  • IP-Intensive Agreements: Such as licensing deals where usage rights, scope, and royalties are unique to the innovation.

Self-Drafted Contracts Versus Bespoke Contracts – What Is the Difference?

For businesses that want to control and manage their liability, self-drafted contracts are generally inadequate. Self-drafted contracts might not properly manage the risks of the business and may include unenforceable terms.

Suppliers must make sure that the standard terms used in their boilerplate contracts accurately reflect their contract and sale process. For example, any discrepancies between the processes outlined in the contract and the implementation of said processes may result in a finding that the clause or clauses impacted are unenforceable. For this reason, both the standard terms and the contract processes must be reviewed on a regular basis with the company's legal advisors to make sure all necessary terms are enforceable.

Contract Drafting Best Practices

To maximize the effectiveness of a bespoke contract, consider the following best practices:

  1. Engage Stakeholders Early: Involve legal, operational, and commercial teams from the start to ensure alignment.
  2. Clarify Intentions in Writing: Avoid ambiguous or overly broad language that courts may interpret against the drafter.
  3. Include Dispute Resolution Terms: Identify governing law, jurisdiction, and preferred resolution methods (e.g., arbitration or mediation).
  4. Plan for Change: Add mechanisms for variation, extensions, or early termination.
  5. Conduct Legal Reviews: Periodically update contracts in light of changing laws, business needs, or regulatory guidance.

Choosing Standard Contracts

There are multiple arguments in favor of the use of standard form contracts. These arguments include:

  • Standardizing contract terms throughout the industry
  • A balance between contract terms
  • Standard form contracts end up including more fair terms that benefit both parties
  • Standard form contracts are generally provided with instructions and include guidance notes for proper use.

Bespoke Versus Standard Form of Contracts

When projects are simple, standard form contracts can be useful for both parties. However, when there are several different parties involved or the projects are extremely complex, a bespoke contract may be better than the standard form used to accommodate the uniqueness of the project. It is also important to consider the scope of the project and location, as standard form contracts that are developed for general international use do not necessarily include or take into account the laws and customs of individual countries.

Benefits of standard form contracts include greater cost-effectiveness, familiarity to the parties, and fewer unanticipated anomalies.  Additionally, standard form contracts allow the parties flexibility, as they can include a vast range of variations on the terms, schedules, and options.  These terms can be specifically tailored to ensure the needs of a particular project are properly met.

Legal Risks of Using Templates Instead of Bespoke Contracts

Standard form or downloadable contract templates may seem cost-effective but pose risks when misapplied:

  • Overgeneralization: Templates rarely account for unique deal structures or legal obligations.
  • Omissions and Conflicts: Critical clauses may be missing or contradictory, especially in multi-jurisdictional settings.
  • No Legal Defense: Courts may find parts unenforceable due to vagueness or misalignment with actual business practices.
  • False Sense of Security: Businesses might assume legal coverage where none exists—especially dangerous in high-value deals.

Frequently Asked Questions

  1. What is a bespoke contract?
    A bespoke contract is a custom-written legal agreement tailored to fit the specific needs of a transaction, rather than relying on prewritten templates.
  2. When should I use a bespoke contract?
    Use bespoke contracts for complex, high-value, or unique projects where standard terms are inadequate or potentially risky.
  3. Are bespoke contracts legally binding?
    Yes, provided they meet basic legal requirements like offer, acceptance, consideration, and clear terms, bespoke contracts are fully enforceable.
  4. What are the disadvantages of using a bespoke contract?
    They can be costly, time-consuming to draft, and carry risk if written ambiguously or without legal expertise.
  5. Can I adapt a template into a bespoke contract?
    Yes, but significant modifications are often necessary. Always have a legal professional review the final draft to ensure compliance and clarity.

If you need help drafting a bespoke contract, you can post your legal need on UpCounsel's marketplace.  UpCounsel accepts only the top 5 percent of lawyers to its site.  Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.