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How to Write a Business Contract

Guest post by: Sue Barrett

Article Overview: In business, it is likely that you will be in situations where you need to use a contract, whether it be with clients, vendors, tenants, landlords or other business partnerships. Here's how to put one together...

How to Write a Business Contract

In business, it is likely that you will be in situations where you need to use a contract, whether it be with clients, vendors, tenants, landlords or other business partnerships. In short, a contract is a legally binding agreement between two or more people of legal age. Using contracts will help protect your company, allow you to conduct business activities with more ease and also add a level of professionalism that you display to clients and business partners.

Before drawing up your contract, begin by having all parties negotiate the terms, the work to be done, the price to be paid and how payments will be made. Also get the legal names, addresses, contact information and sometimes tax ID numbers of the parties involved in the contract.

When you are preparing your legal document, keep the language as clear as possible, so that there are no miscommunication. Having an attorney review your completed written draft can be helpful.

The first part of the document generally includes the date into which the agreement is being entered and the contact information of the individuals or companies involved.

Next, explain the terms of the agreement in the body of the document. Be specific when it comes to quality of work to be completed as well as dates and deadlines. Are progress reports or meetings required during the contract period? Clearly explain all risks and obligations of both or all parties. If you are entering into an agreement using a contract written by the other party, read it carefully and note any ambiguous words that may need to be changed or clarified.

You may also want to include instructions on how either party is able to get out of the agreement. To avoid court and legal costs connected with lawsuits, include a clause specifying that any dispute relating to the contract will be arbitrated.

The last step is getting both parties to agree to and sign and date the document, if necessary in front of a witness (notary) or attorney. All parties receive a copy of the signed agreement.

When any substantial changes are made to the contract, it can be a good idea to note them in writing and have the addendum signed by all parties involved.

If you are using legal documents on a regular basis, you can save time by using pre-written contracts (like service agreements, invoices, consulting agreements, purchase orders, independent contractor agreements, bill of sale, etc.) that are put together by legal professionals. You do not have to write the contract yourself, instead you insert the terms of your particular arrangement that you have negotiated with the other party or parties. There are also resources online that offer legal advice and will review your documents for you for less money than it usually costs to hire an attorney.

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Article Tags: agreements, business contract, contracts, legal advice, legal documents, small business, write a contract



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