A well-written contract usually addresses the provision of work or services, how much they will cost and who will pay.
What should you include in a contract to ensure that it achieves the goals the parties have in mind and is a legally binding document?
Format and parties
While there is no particular format for contracts, a business contract usually contains an offer from one party, acceptance of the offer from the other party and consideration, which is normally money. The parties must be legal adults, and the contract to which they agree cannot involve anything illegal such as a fraudulent transaction.
Scope of work
The section on scope of work should describe the kind of work or services the parties want and the materials or products required. The agreement should outline the responsibilities of each party.
Termination
Another section should state how long the agreement will remain in place. If the contract addresses continuing services, it should explain how the parties can terminate the agreement.
Breach of contract
It is also important to explain how the parties to the contract will handle a dispute, including a preference for mediation or arbitration to settle differences. The contract should assign responsibility for paying court costs and attorneys’ fees as well as any damages that arise out of a dispute.
Legal assistance
A well-written contract should address the pertinent points between the parties, help to avoid misunderstandings and serve overall as a good risk management tool. An attorney can help you draft an effective contract and ensure there will be no legal missteps.