Struggling to create a professional contract for your deal? This can be a challenging task because you’ve to remember legal terms & clauses. Here’s a piece of good news for you. We’ve shared some proven tips & tricks to draft a solid contract that protects both parties & avoids future headaches. Let’s begin!
Why You Need a Contract
These are the places where you must have a contract:
- Exchanging significant value (money, services, goods)
- Protecting intellectual property
- Starting a new job
- Buying or selling property
- Hiring contractors
- Publishing creative work
And guess what? That verbal agreement you made? Yeah, that’s not going to cut it when things go wrong.
Let me share a quick story that’ll drive this home…
No contract = No protection
The biggest Mistakes People Make with Contracts
Here’s what we see happening all the time:
- Not checking if all parties can legally participate (must be 18+!)
- Forgetting to specify exactly what’s being exchanged
- Making agreements too vague
- Not including termination clauses
- Skipping the dispute resolution details
But the good news for you is that these mistakes are so easy to avoid!
But here’s the scary part…
10 Essential Steps to Writing a Contract That Actually Works
We’ve got some quick & powerful steps to help you craft a contract that works. And the best part is… you don’t need a law degree…
All you need is these three steps & some common sense.
Get Crystal Clear on the Basics
Well, in contract writing, it’s “just keep clarifying.”
Start with the absolute basics:
- Who is involved
- What is being exchanged
- When it’s happening
- Where it’s taking place
- How much it costs
No complicated language needed. Be clear!
And here’s a valuable tip that’ll save you headaches.
Always include a section for definitions. Yes, we know it sounds boring, but defining your terms upfront prevents those parties from saying, “but I thought you meant…” later.
Protect Your Interests
This is where most people either go way too soft or way too aggressive.
You need to include:
- Confidentiality clauses (if needed)
- Termination conditions
- What happens if someone breaches
- How disputes will be handled
- Payment terms & schedules
Write these in a way that protects both parties. Because a contract that sounds too one-sided asks for trouble.
Now, let’s talk about something that everyone overlooks.
The importance of including a force majeure clause. This clause protects you when things go sideways due to circumstances beyond anyone’s control.
Always include a clear dispute resolution process. Hope for the best, but plan for the worst.
Use Addenda
Here’s something that’s gonna make your contract process so much easier.
Sometimes, people put together the contract & realize they forgot something important. It happens. No worries! That’s what addenda is for.
Whether you need to add extra details right when you’re signing or even later down the road, you can totally do it. Just make sure everyone involved puts their signature on that addendum.
Make It Legal
Your contract is worthless if it’s not legally enforceable.
So you need to:
- Make sure it’s for legal goods/services
- Get it signed by all parties
- Keep copies for everyone
- Make sure it complies with state laws
Get it written in a document.
Use the Right Names
When you’re writing a contract, you need to get the names right. And I’m not just talking about spelling. If you’re dealing with a corporation, you better identify them as such.
When things go sideways, you need to know exactly who’s responsible & who you can take action against.
Pen Down Consequences
What happens when someone doesn’t deliver on their promises? You need to spell this out.
When someone violates a contract, it’s not just about hurt feelings. We’re talking real penalties here – compensation, termination, legal action.
And you know what?
Having these consequences spelled out shows that you’re serious about this agreement. Because if you’re not serious about your business, who will be?
Avoid Costly Disputes
No contract is bulletproof. Disputes can & will happen. That’s why you absolutely need a dispute resolution clause.
And here’s the best part.
When you have a solid dispute resolution process in place, you’re saving yourself so much time, energy, & money down the line. Trust me, nobody wants to end up in a lengthy legal battle that drags on forever.
Make it simple and easy-to-understand
Your contract should be easy to read & scan. Here’s what matters:
- Clear communication about what everyone expects
- Clear deadlines and payment terms
- How to handle problems when they pop up
- When & how to end things if needed
Avoid using legal jargon, especially if you don’t even understand what it means! Using words you don’t understand is like trying to impress people with AI-generated content. It might look good, but it’s not fooling anyone who knows what they’re doing.
Create a Signing Page
This might seem obvious, but you would not believe how many people mess this up.
Keep it SIMPLE:
- Names
- Dates
- Signature lines
And when you’re ready to make that offer? Send it.
But here’s a power move. Set a deadline for their response.
Think about it – when you’re job hunting, companies often give you two weeks to decide on their offer.
Proofread Your Contract
Even the most carefully written contract can have minor grammatical mistakes.
A single misplaced comma or wrong word could completely change the meaning of your contract.
So what’s the solution?
Read your contract aloud to catch mistakes in grammar & punctuation.
Use an online grammar checker tool. Seriously, these tools are lifesavers! They spot mistakes that your tired eyes might miss after staring at the screen for hours. These tools highlight:
- Grammar issues
- Punctuation problems
- Clarity & readability
- Potential ambiguities
So take that extra step & run your contract through a grammar checker.
One More Thing You Need to Know
Here’s something that most experts won’t tell you.
The best contracts are living documents. They should be reviewed & updated regularly as your business relationship evolves.
Don’t just “set it & forget it” – that’s a mistake.
Instead, set calendar reminders to review your contracts every 6-12 months.
Concluding Remarks
We hope this guide helped you write a powerful contract in the shortest time possible. We’ve kept all the things simple so that you can easily apply them. So, follow these steps to craft a contract for your business. Best of luck!