Contract writing essentials – Tutorial
Simply put, a contract is an enforceable agreement between two or more parties. The contract contains the promises made by the parties to one another, which is legally known as "consideration." These promises define the relationship being undertaken as well as what happens if the business relationship doesn't work out. If one party fails to act according to their promises, then they have "breached" the contract and can be found liable for damages. The damages typically equate to what the non-breaching party would have received if there had been no breach.
Being a legal document, written contracts usually have both a formal writing style and format.
Some contracts are simple, but binding agreements, with few words used for staightforward transactions that require such a document. Anyone can write one of these, but it should still be carefully done and follow a standard format. Others can be quite long and complex, especially if there are serious legal ramifications or large amounts of money at stake. For this type of contract, it is probably better to have professional help. In any case, at one time or another, we all will have to read or write a contract, and eventually sign one. Even something as simple as a car rental agreement is a binding contract. It is best to educate yourself about contracts to some extent so you are prepared when the occasion comes up.
Any written contract should include four key provisions:
1. The parties' names
2. The parties' obligations
3. Any event that would excuse performance
4. The consequences of an unexcused failure to perform
First and most importantly, Title it "Contract." Do not leave this one to chance. If your client wants a contract, call it a contract.
State the correct legal names of the participants, or the registered legal names of the companies, in the first paragraphs of the document. This might seem simplistic, but it is very important. At the same time, establish what title or name they will each be referred to as throughout the contract. Do not use the term “contractor” for one party, as it can add confusion.
Write in short sentences. Short sentences are easier to understand than long ones.
Write in active tense, rather than passive. Active tense sentences are shorter and use words more efficiently, and their meaning is more apparent.
Write numbers as both words and numerals: ten (10). This will reduce the chance for errors.
Don't be creative with words. Contract writing is not creative writing and is not meant to provoke reflective thoughts or controversies about nuances of meaning. Contract writing is clear, direct and precise. Therefore, use common words and common meanings.
Be consistent in your word use. If you refer to the subject matter of a sales contract as "goods" use that term throughout the contract; do not alternate calling them "goods" and "items". Maintaining consistency is more important than avoiding repetition.
Assume the reader is a knowledgeable layman. If your writing is so clear that a layman can understand it, then it is less likely to end up in dispute.
Define words when first used. Instead of writing a section of definitions at the beginning or end of a contract, consider defining terms and concepts as they appear in the contract. This will make it easier for the reader to follow.
Complete each paragraph by writing the contract terms that apply to that paragraph