01/24/2022
informational post--NOT LEGAL ADVICE--
What makes a good contract?
Identify Each Party: This may seem like a no-brainer, but not only is it actually easy to get wrong, it’s also very important to get right. Each party needs to have its full legal name included. Specifically, you need the legal name of the entities that are entering the agreement. This could mean an individual or it could be a full company name (including any legal suffixes like LLC).
Simplicity is Key: The terms of the contract should be simple and easy to understand. By keeping a contract simple, you not only make it easier for both parties to follow the terms but in the event of litigation, you can ensure that you don’t accidentally end up on the wrong side of your wording.
Be Thorough: This may seem counter to the last point, but don’t leave anything out. If something comes up verbally, ensure that it is included in the contract. Before the agreement is signed, it can also be amended in writing as long as all parties initial the change.
Plan Ahead: In the event of a disagreement after the fact, ensure that your contract states how any issues will be resolved whether through mediation or arbitration. Also, decide where the resolution will take place. If parties are located in different states, it will need to be decided which state’s laws will govern the contract.
Payment: If your contract involves money or assets changing hands in any shape or form, as most contracts do, ensure that the contract specifics who pays whom, when payments will be made, and how they will be made.
Proof: As with any document, you will want to proofread it several times. Even if you are having a lawyer draft the contract or review it for you, they may not understand all the intricacies of what you are trying to accomplish with your contract. It may help to imagine yourself as an outside party while you are reading to ensure that everything is clear and understandable.
