Writing a business contract can seem like a tall order for people who’ve never done it before. But it’s actually relatively easy once you know how. In this post, we take a look at how professionals write business contracts that hit all the right points. Check out our advice below.
Choose Which Law Will Govern The Contract
The laws governing contracts differ from country to country and state to state. Thus, before you even begin writing a contract, you’ll want to choose which law will govern it. Ideally, you’ll want to choose the jurisdiction that provides you with the best framework for your business. Don’t rush into this decision.
Write Down How You’ll Resolve Disputes
During any complicated business contract, disputes will arise. One party may be happy with the contribution of the other.
It’s a good idea, therefore, to put in writing how you will resolve some of the most common disputes that you’re likely to face. You’ll want to cover things like terms of service, payments and intellectual property.
Make Payment Obligations Specific
Don’t allow any room of maneuver when it comes to payments. Be specific about how much the paying party must pay and by which date. If they are paying in installments, be sure to specify each date that they must make a payment (perhaps a specific day of the month).
Use Existing Tools
The professionals rarely write contracts from scratch. Instead, they find suitable templates and then adjust them according to the specifics of the particular contract. Be sure to download a free letter of intent template. This will help you spell out what can be expected from each party. Download contract templates too so that you can make sure that you cover all your bases.
Put It In Writing
It might sound simple, but putting your contract in writing is always the best policy. Don’t rely on verbal contracts. They are incredibly difficult to prove in a court of law. Some jurisdictions don’t accept them.
Identify Each Party
You’ll also want to make sure that you specify each party correctly. Make sure that you use your clients’ full registered business name. If the name of the company is Robinson’s Roofing LLC, then use the full term in all your documentation. This eliminates the risk that they will claim the contract refers to another company. To be safe, always use the registered name of the firm throughout the entire document.
Spell Out Every Detail
When it comes to writing your contract, don’t leave any aspect of the work to chance. Spell out every detail so that you can properly define the scope of your obligations. Use the contract itself to avoid project creep where the customer continually asks for more services that aren’t in the original contract.
If you want to add flexibility to the contract, settle on a basic payment and then specify the conditions under which you may charge more. As before, state how much you’ll charge for each extra hour you work or project that you complete.