Contracting is a typical activity in business. No contract should be created lightly, even if hundreds of others are made. There are certain steps required to create a fair and valid business agreement.
Type the Document
Business contracts are more legitimate and legible when typed instead of handwritten. The first and most basic step is to make a contract that anyone can read and understand.
Identify the Parties
Identify each party that is obligated to a specific duty in the agreement. Any stranger who reads the contract should know who the parties are, what their duties are and how their rights are protected.
Be Transparent
Every contract must be clear and transparent for anyone to understand. It must include a clearly written outline with columns, headers and bullet points on a plain page layout. To be valid, the agreement must be mutually beneficial between two or more parties.
Outline the Terms of Termination
Every contract should include a list of terms for termination. This clause is necessary to prevent a lawsuit that is costly to either party. Included should be a list of steps required to release oneself from the agreement.
Agree on a Dispute Resolution
Include a form of resolution if a problem occurs. The main options are to go to court or to seek an arbitrator or mediator.
Choose the State Law
It is simple to create a contract for parties in the same state. However, a contract that is valid in one state may not be valid in another. The complications involve different states with different business laws. Whoever writes the contract should choose and apply only one state law to the contract.
Review Examples
Anyone who has never created a particular contract before should review examples first. Every company or organization provides different services and has different legal needs. The same legal document could vary from having one page to over 100 pages. It takes some legal research to know which clauses to include or exclude.
Every business contract should be designed to last for years. Being a lawyer is not necessary to compose a valid legal document. There are certain components that are needed to ensure that the contract remains mutually beneficial to all parties involved.