How to Write a Contract: Differences, Steps, and Examples - Growth Freaks

How to Write a Contract: Differences, Steps, and Examples

how to write a contract

There are many things to consider when entering a contractual tie with someone. However, one thing is certain. You must give it a fair amount of thought because once you do it, there is no going back. The document is legally binding. That’s why, when you write it yourself, you need to be as careful as possible on how you word it. Here are the steps on how to write a contract.

1. Make Sure All Parties Can Legally Participate

This idea means that everyone who must sign the contract has to be of legal age to do so. If not, there are some things you can do about it. For example, most states allow emancipated minors to sign contracts for themselves. If not, a parent or guardian of the minor can sign on his or her behalf.

In the same way, you need to make sure that none of the participants are inebriated or mentally impaired. If so, the law will not consider them fit to decide whether or not to sign the binding document.

2. The Consideration

Every contract has to have a consideration. This means that an object of value gets exchanged for something else that has value. Take into account your consideration and value how much it’s worth.

3. State the Purpose of the Contract

The purpose of exchange of the above consideration of your contract is imperative. Also, it must be legal. If it does not meet the requirements of the law, your contract is null. For example, if you know that gambling is not permitted in your state, you cannot sign a contract with someone to be your blackjack dealer at an event.

4. Use Simple Language

When writing the contract yourself, it’s always better to use day to day terms instead of legal ones. Plainly state what you mean in each paragraph. If you ever end up in court, a judge will adjudicate depending on how a regular person interprets the contract.

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5. Write Specific Dates

If you need to put down a date, never use ambiguous terms that can have different interpretations and that can lead to loopholes. For example, do not write ‘payment should be made bi-monthly.’ Instead, clearly state the months of the year in which your party will receive payment – January, March, May, etc.

6. Add a Non-Disclosure Clause

If you want to know how to write a contract for a business, you should add an NDA, also known as a non-disclosure agreement. Only insert it into the contract if you know that the other party will be exposed to sensitive information. This may include your business strategy, details about your clients, private information about the products you sell and so on. The clause may be mutual, so as to assure your employee that you will not be exposing private information about them either.

Knowing how to write a contract is crucial when you are faced with such a situation but don’t want to get a lawyer involved. Remember to be as clear as possible when wording everything so that you do not leave any room for interpretation. Write to us in the comment section below and let us know your thoughts and opinions.

Author: Amanda Knowles