Writing Contracts: Items You Must Include

Writing Contracts: Items You Must Include

If you own a business, writing up contracts with your clients or business partners is a necessary practice. Though it can feel bothersome to do so, drawing up a contractual agreement keeps you and your business safe from potential harm from dishonest second parties or even just misunderstandings. It is important to write up a contract with all clients and other businesses you may want to partner with; taking this precaution can save you from a lot of avoidable legal trouble. Here’s a list of what to make sure include in each of your contracts:

  • The Agreement. After negotiating, offering and counter-offering, two parties come to an agreement of what service one of the parties will give for the payment the other party will give in return. Payment can be made through services in return or monetary reimbursement.
  • The Conditions. The conditions are what each party is obligated to do in order to perform the required duties laid out in the agreement. It is a good idea to include how well these duties must be performed. The more specific the provisions, the stronger the contract.
  • Payment Terms. How and when will your company be reimbursed for your services? Will you be paid in increments or will the other party offer a service in return? If so, when will this service need to be completed?
  • Exceptions and Consequences. Though contracts usually stand, there may be some extenuating circumstances outside of each party’s control that may call for a termination of the contract. Define these. Also define the consequences for any party who breaks the contract illegally or does not hold up their end of the deal.
  • Liabilities. What are the liabilities of each party in case certain events take place?
  • Time Frame. You should outline how long the contract will be in effect.
  • Signatures. All parties must sign and date the contract in order to make it valid. Making copies for each party to keep is a good idea.
  • The Business Partnership Contract. There are a few extra provisions you must include if creating a contract for a partnership with another business. You should address how profits and losses will be distributed, the level of authority each partner has, who decides what, who will manage what, how to handle disagreements, guidelines for bringing new partners into the agreement, and what happens with the withdrawal of a partner.

Although these are the provisions you must include, there are others that could be incredibly beneficial for your situation that you should strongly consider including in your contract, such as Entire Agreement Clauses, Arbitration Clauses, and Force Majeure Clauses to name a few, but you should consult with a trusted attorney who can further recommend what to include and can guide you through the contract process. Omni would love to be a part of that process. Feel free to contact us today!

Photo Credit: Guudmorning!

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