Doing business can be tricky because it involves a lot of trust on both parties especially if large sums of money are involved. At this point, oral promises lose their effectiveness and a written agreement that can be used in court is needed just in case the agreement fails.The written agreement is called a contract and lays out what is expected for both parties to do in the business they are conducting and what legal measures would be taken in the event when those expectations are not met.
Because of the purpose of a contract, contract-writing can be a tricky and technical business. But below are some basic tips on how to write a contract.
- Be as explicit as possible. As mentioned earlier, a contract sets the expectations of both parties signing it. Therefore it is important to clearly state what those expectations are. For example if it is an employment contract, the exact figures of the salary and the number of hours should be indicated there.
- The length of the term of the contract should also be indicated. Some contracts indicate how many years it will be in effect while others indicate a particular date before the contract is terminated.
- Another thing that should be included is the legal action that either party will take in case of a breach of contract. The choice of a court which has the jurisdiction of the case if a legal action occurs is an example of this.
- The ownership of the product should also be included, if a product is involved. For example, a contract between a writer and a client should state who will own the rights to what the writer has written after it is submitted to the client.
- Although it is not exactly a tip on writing a contract, the help of a contract lawyer should be availed of because contract-writing goes more than the writing itself and legal considerations will also come into play.
How to Write a Contract