Contracts are an essential part of doing business. They provide a clear and legally binding agreement between two or more parties, outlining the terms of their relationship and corresponding obligations. In addition to providing legal protection, contracts also help to build trust and prevent misunderstandings and disputes from arising.
A well-drafted contract protects the interests of all parties involved and ensures everyone is on the same page. By taking the time to carefully draft and review contracts, you can set the stage for successful business relationships.
The 7 Fundamental Steps of Drafting Contracts
1. Identify the Parties Involved and Their Roles
Identifying the parties involved in a contract and their roles is an important step in the contract drafting process. This helps to ensure that there is no confusion about who is responsible for what, and it can help to prevent any type of conflict and potential legal implications later on.
To clearly define the parties to the contract, you should include their full names and any relevant identifying information, such as their business or company name. It’s also important to specify their roles in the agreement. For example, if one party is hiring the other to provide a service, their function would be that of the service provider, while the other party would be the client.
2. Determine the Purpose of the Contract
Knowing the purpose of your contract guides the rest of the drafting process and ensures that the contract is tailored to the specific needs of the parties involved.
For this step in contract drafting, you should consider the goals and objectives of all contracting parties. For instance, if one party is hiring the other to provide a service, the purpose of the contract would be to outline the terms of the service agreement. This includes the scope of work, the price of the services, the duration, and any other relevant details.
In addition to outlining the specific terms of the agreement, the purpose of the contract should also address any potential issues that may arise during the course of the relationship. For example, if one party is providing a service to the other, the contract should include provisions for what will happen if the service is not performed to the agreed-upon standards.
3. Outline the Terms of the Agreement
This is where you’ll lay out the specific obligations of each party, as well as any rights or privileges they may have.
When outlining the terms of the agreement, consider the following:
- The scope of the contract: What is the contract intended to cover? Make sure to specify any limits or exclusions.
- The obligations of each party: What is each party responsible for? Be specific and include any relevant deadlines or benchmarks.
- Any rights or privileges: Does one party have any rights or privileges that the other party does not? Ensure that these terms are clearly stipulated in the contract.
- Any warranties or guarantees: Are there any warranties or guarantees that one party is making to the other? These should be carefully stated as well.
- Any consequences for breach of contract: What happens if one party fails to fulfill their obligations under the contract? Be clear about any consequences and specify any remedies available.
Make sure that all the elements of a contract are present to ensure its validity.
4. Use Clear and Concise Language
It’s important to use simple, straightforward language when drafting contracts. It’s also best to avoid legal jargon whenever possible. This can help to ensure that the contract is easy to understand and can be interpreted correctly.
A well-written contract should leave no room for ambiguity or uncertainty about the terms of the agreement.
Simple tips for contract drafting
- Avoid complex or convoluted language.
- Use active voice whenever possible, as it tends to be more concise and easier to understand.
- Avoid using unnecessary words or phrases. Keep the contract focused and to the point.
- Use headings and subheadings to help organize the contract and make it easier to read.
- Use bullet points or numbered lists to help break up large blocks of text.
5. Review and Revise the Draft
By taking the time to carefully review the draft and make any necessary revisions, you can help to ensure that the agreement is effective in protecting the interests of all parties involved. This also ensures that you’ve got the message across as clearly as possible.
Key considerations when reviewing contracts
- Read the draft carefully and make sure that all necessary terms are included.
- Check for grammar and spelling errors. A contract with errors can be confusing and may not be taken seriously.
- Make sure that the language used is unambiguous and easily understood.
- Consider any legal implications of the contract. It’s a good idea to have a lawyer or other legal professional review the contract to ensure that it is legally binding and enforceable.
- Make any necessary revisions to the draft. This may involve adding or removing terms or making changes to the language of the contract.
6. Seek Legal Assistance for Contract Review
The next step in contract drafting is to consult your legal team for further review. A lawyer or other legal professional can help to ensure that the agreement is legally binding and enforceable. They can also provide valuable guidance on any legal implications of the contract.
Having a fresh set of eyes look at your draft helps to identify any potential issues with the contract. They can also suggest revisions to address these issues. Most importantly, your legal team can provide guidance on any relevant laws or regulations that may apply to the contract.
If you don’t have a lawyer or other legal professional available to review your contract, there are other resources available. For example, you can use online legal resources or seek guidance from a legal aid organization
7. Finalize the Contract
Finalizing a contract is the last step in the contract drafting process. But that is not to say you are already out of the woods. If anything, this is the most crucial part. It involves completing any final revisions to the draft and having the contract signed by all parties.
When finalizing the contract, it’s important to make sure that all parties involved have a clear understanding of the terms of the agreement and their obligations under the contract. It’s also a good idea to have all parties review and sign any necessary documents.
It is also during this stage that you consider your contract signing method. There are at least three ways you can go about it: online signing, in-person signing, and via mail. The first option is undoubtedly the easiest and most convenient way to seal the deal.
Make Contract Drafting and Signing Easy with Fill
There are a number of tools and resources available that can help to simplify the contract drafting process. One such tool is Fill, which is a platform that allows users to create, sign, and manage contracts online.
Fill offers a range of customizable contract templates that can be easily modified to fit your specific needs. It also has a wide range of features that help to streamline the contract drafting process. This includes the ability to use electronic signatures, track document progress, and collaborate with others in real time.
Using Fill simplifies your contract drafting process by eliminating the need for paper copies, courier services, and manual processes. It can also help to speed up the process of creating and signing contracts, making it easier for users to get agreements in place quickly.