Business Law - Drafting Legal Contracts

By Rebecca McLellan

The whole point of writing a contract is to offer protection between you and the person that you are making the contract with. It is thus very important that the contract is written well and in effect water tight so you will be fully protected should anything go wrong.

As for small businesses, you may not have the time or money to be able to get a solicitor to draw up a contract for you every time you need one. This article will offer some tips and advice on how to write up a good legal contract.

You should always volunteer to make the first draft of a contract. It will be more cost effective and you will be able to draw up terms which a more preferential to you.

You don't have to make your contract unnecessarily complex. Use terms that you and the person you are making the contract with understand. Your contract will be more enforceable if it is clear what you are trying to say. If your contract is not clear, then it may be used against you if anything were to go wrong.
You need to ensure that you use all the correct business names when drawing up your contract. This means that if you were doing business with another company, you would use the businesses name in the contract as opposed to the individual that you have been dealing with to arrange the deal.

The most important thing when writing a contract is to make it as detailed as you possibly can as to leave no margin for interpretation. You should not leave anything up to assumptions but instead make sure that you have got down in writing what you expect to happen. You should include all the rights and obligations of the parties involved and write down anything that has been agreed on verbally in order to make it official.

If you need to make any changes to the contract you will need to make a separate amendment to attach to the contract, you cannot rewrite the contract from scratch. You will need to make sure that any amendments are initialed by all the parties involved in the deal. You should also make sure that you include all the details surrounding payment and make sure that you use explicit amounts, you must be very clear. You should also include what the method of payment will be, the date of the expected payment and what will happen if the payment is late. You will also need to include clauses in which the contract may be ended. It is also important to include a section on how disputes will be dealt with if they arise.

If the person or company that you are doing business with is based in another country, you will need to decide which countries laws will govern what is written in the contract. This will be the place in which legal action will take place in the event of any problems.

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