Compliance

Take control of your contracts: all you need to know to write a contract

Rachel Lee
October 20, 2021

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Just because we at Contractbook verge on the obsessive when it comes to contracts, does not mean that everyone else is. But we do want people to understand where our passion comes from. For, we see a well written contract as an incredible asset to a company. That may sound ludicrously hyperbolic, but it is true. 

Knowing how to write a legal contract can mean that any contract you enter into will offer you protection in the future. Plus, well-written contracts can be a way to clarify and strengthen any business relationship or partnership. Here, we outline all you need to know about contracts so that you can create one that is valid and enforceable while outlining clearly each party’s rights, duties, and obligations. You can thank us later when you find that your contracts proffer better results and enhance working relationships.

How to write a contract agreement 

While knowing what should be included in a contract is key to compiling a solid, helpful agreement, learning how to write a contract is more than just writing a sum of the parts. Contracts need to be understandable and comprehensible. At Contractbook, we passionately believe that contracts should not be complicated. They need to be clear so as to help engender trust between two parties. 

To do so, ensure that the language is as plain and straightforward as possible. Using a clear and easy-to-follow layout is also helpful. You really do not have to come up with four syllable words, when a simple term will suffice. Sentences should be kept as short as possible and only deal with one rule at a time. Language should be active and precise without using the passive voice. Doing so makes it far easier to understand who should be doing exactly what and when. 

The order in which the contract is written is also vital. Writing the most critical and burdensome rules should be done at a juncture that they cannot be missed. Do not put essential parts of the contract in an area of text where they may be missed. In some countries, doing so may make the contract invalid. Crucially, too, it simply does absolutely nothing to help strengthen your business relationship. In fact, it could be to its detriment. 

Contracts are therefore immeasurably helped by being divided into numbered paragraphs defined by the subject they are describing. Giving titles and headings can make contracts far easier to read - even by those inexperienced in dealing with contracts. It is such a simple tip, but very useful. Plus, if an agreement is long and complicated due to the nature of the subject, try to insert a table of contents. 

Important elements of a great contract

Now you know the how, now you need to know what to include. Essential elements to include in a contract to make it worthwhile and high value are:

  • Descriptions of the purpose of the contract
  • Descriptions of the obligations of both parties
  • The duration of the contract and how the contract can be ended
  • How any disagreements can be settled, and where

If you need to know how to write up a contract for payment, it is also essential to insert what that payment structure is. Doing so under the obligations section of the agreement can be an excellent place to include it. However, wherever it is put, it is essential that it is not hidden from view. The clearer it is, the more trust you can build in your business relationship. Plus, the clearer it is, the less likely that the wrong payments will be made at the wrong times. Now is not the time to feel awkward when talking about money. 

Elements of a valid contract

For a contract to be valid, several elements must be included as standard. Otherwise, all your hard work could be for diddly squat. For starters, each party has to be identifiable. That means a name, address, and some form of identification. Another essential element is the signature. The parties listed must sign the contract with a physical or digital signature. Finally, an effective date and the date a contract was signed must also be included. Without these dates, contracts cannot be used as it is impossible to know when the contract can come into effect. 

And, while strictly not an element of a valid contract, how the contract is signed is essential. For a contract to be valid, it must be agreed to voluntarily and actively. Any contract that is signed fraudulently or under duress cannot be upheld. So now is not the time to come over all Tony Soprano. 

How to write up a contract - overall takeaways

Knowing how to write up a contract is tricky. We really do get that. If you do not have a law degree, getting a contract written and signed can be such an overwhelming prospect. 

While we have outlined the basic elements above, using contract templates is a far easier way to ensure you are ticking all the boxes when it comes to writing a valid contract. Our library of contracts is full of templates that are a fantastic starting point for many different business agreements or arrangements. For example, our non-disclosure agreement, employment contract, or collaboration agreement are all standard documents of high quality. Written by lawyers, they are the perfect way to create a contract quickly without having to worry about how reliable they are. 

Plus, our templates can be used repeatedly and populated easily. Doing so means that if you need several contracts of the exact wording - just with different parties - editing them with the relevant information is painless. And, by using our software, you can manage the entire lifecycle of a contract too. That’s important as it really helps leverage the power that a contract can have. For, while writing a reliable, enforceable contract is critical, storing them correctly and using them to help trigger events like future renegotiation can ensure that contracts remain as useful as they were when they were originally signed. 

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