From simple beginnings, trading has turned into a global business. Nowadays, countries would exchange goods or services, a big leap from tribe to tribe bartering. People trade with each other every day via buy and sell, a standard way of conducting trade. Deals are usually closed with words and handshakes; however, it is now wise to have written commitments. There are several contract templates available, and one can pick which design will best suit his needs.
Even with templates, contracts need to be personalized for everyone involved in the agreement. If this responsibility falls into your hands, here are a few tips to create a contract:
Basics.
A contract needs to be presented in a professional format, so Comic Sans and other quirky fonts are not recommended. Stick with widely used regular fonts such as Arial, Calibri, Cambria, or Times New Roman. Follow the suggested rules for text alignment. Go for Justified as your primary document format to maintain a consistent edge to edge text distribution.
Formality.
Identify the parties involved in the contract. Address them appropriately and include references if common nouns or shortened names would be used. For example: “XYZ company, also referred to as “company” in this contract.” This guarantees that there will be no confusion with the naming convention utilized in the agreement.
Highlight Details.
Text-wise, important aspects can be emphasized using bold fonts, underlines, italics, and bullet points. The essential elements will vary depending on the type of contract being created. Here are some of the common ones:
- Payment – Details regarding mode and terms of payment should be specified in a contract. Do not use vague statements when money is involved.
- Duration – This defines the effectivity period of the contract. Set exact start and end dates as this will give you an opportunity to review the agreement when it ends and adjust it as needed if it is up for renewal. It is advised to avoid open-ended contracts as parties may regularly change commitments, which may result in slow progress and headaches.
- Deal Breakers – Contracts contain expectations and goals to make sure that all involved parties adhere to their obligations. Failure to meet certain targets or a total disregard of the deal can nullify the agreement, and this needs to be clearly stipulated in the document.
- Conflict Resolution – As business deals progress, mistakes do happen. It is vital to have a process that states how differences should be resolved at the signatory level (parties involved) instead of immediately going straight to court.
Reference Laws.
There are existing laws that regulate a myriad of matters. Use these laws as a foundation for your contract. Mandates may vary between states or countries, so be precise with the reference law that you will incorporate in the agreement. Laws should be stated in verbatim if it will be indicated in its entirety. Otherwise, declaring the article number, section, and paragraph of the rule being referenced to would suffice.
Sign and Notarize.
The contract will be considered not valid if it is unsigned. All signatories should use their formal names and signatures. To completely legalize the binding agreement, have your document duly notarized by a trusted notary public. This certifies that:
- All involved have agreed and willfully signed the contract.
- All identities included in the contract have been verified.
- The document is authentic.
All these certified attributes minimize the chances of fraud, which is very beneficial for all those bound by the contract.
Simplify.
Technical terms and highfalutin words may come off as jargon to the ordinary reader. Construct your contract in such a way that it can be understood easily. This avoids potential misunderstandings and conflicts in interpretation for stakeholders that were not involved in creating the agreement.
Perhaps the most important tip for creating a solid contract is to discuss it with the right people. Several persons may step in, voluntarily or involuntary, and this may muddle the specifics of the contract. Directly speaking with an official representative assigned to close the deal simplifies the whole process.
Let these tips guide you in coming up with a solid contract. Do print out your document using professional-grade paper. You can also choose to have digital copies of the signed forms for safekeeping. Always remember to provide both parties their own finalized copies as well.
