How To Write A Contract – The Essentials
A 1L’s first contracts class is often an intimidating experience, if not just because the 1L saw “The Paper Chase” a few weeks or months before starting law school. Once we get over the initial realization that our Contracts professor is not as heavy-handed as Professor Kingsfield but just as competent, we wrestle with what a contract is and what a contract is not. At some point, we wonder how these documents, often voluminous with endless provisions of legalese, even get drafted in the first place by mere humans.
To be candid, many lawyers never write a contract technically from scratch but use a prior contract as a form or template. They then add and modify all language as necessary to mold and shape it into a freshly created legal document. Writing a contract may be a daunting task since a document is being created that has implications that may be enforced legally. There is always the fear of excluding or miswording something important that leaves a client exposed and unprotected.
Thus, to draft a contract, first list all the essential terms that a contract must include. It may be advantageous to divide them into the contract’s basic terms, i.e., those that deal with the who, what, when, how, and where of the contract, and those terms that may be considered unique to the contract itself.
The basic and essential terms of a contract include the following:
- Proper identification of the parties to the contract involves listing the parties’ correct legal names. For example, if working with a carpenter who has incorporated her business, you would identify her as a party to the contract by the legal name of her business rather than her personal name.
- Detailed provisions explaining the rights of each party to the contract.
- Detailed provisions explaining the obligations of each party to the contract.
- The payment terms and requirements of the contract, i.e., paying by cashier’s check within 30 days of delivery.
- The circumstances under which the contract may be terminated.
- The procedure(s) for terminating the contract.
- How disputes will be resolved, i.e., by binding arbitration.
- The state’s law that will govern the contract.
- An indemnity clause dictating which party to the contract will be liable if any dispute arises. This provision identifies which party will have to pay legal fees if any disputed should arise.
Once these details are adequately identified, it is necessary to draft an outline of the contract, specifying each section, paragraph, and sub-paragraph. It is also necessary to gather and review any exhibits to the contract to ensure their inclusion in each section, paragraph, and subparagraph as required. Plan on writing as many drafts of the contract as needed until you are satisfied that every detail has been covered properly.
Next, consider each possible scenario under the contract and determine whether the contract more than adequately addresses each circumstance. Perhaps the most important step is measuring whether the client is getting what it wants and whether the client’s interests are protected under the agreement.
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