How to Write a Simple Binding Contract

A contract does not need to be complicated to be enforceable.

A contract is a written document that records the terms of an agreement between two or more parties. Understanding the legal requirements of a basic contract will allow you to draft a document that is binding and, if necessary, enforceable in a court of law.

Instructions

1. Identify the parties to the contract. Your contract must include sufficient information for a third party to be able to determine who is intended to be bound by the agreement.

2. Make a list of what both parties are agreeing to. Specificity is necessary, as it will provide important guidance later if there is a disagreement regarding the terms. Avoid violating the parol evidence rule and plan to incorporate in writing every significant detail that the parties consider necessary for complete performance of the contract.

3. Identify the consideration that is offered and the services to be provided. Specify who will provide the consideration and at what time the consideration is due to be paid. Describe the nature and extent of the services. For example, if John is to paint Harry's house, include such details as the color and the areas to be painted.

4. Draft the contract. Begin by identifying the parties and then proceed to describe the terms of the contract, incorporating the details identified in your list. Conclude by providing space for both parties to sign. Also include space for witness signatures. Witnesses will observe the parties at the time of signing.

5. Provide copies of the contract to both parties and secure the original contract in a safe place. In the event of breach, production of the original contract may be necessary.

Tips & Warnings

• A binding contract requires consideration, usually money, which is offered in exchange for either goods or services. Documenting the precise terms of the agreement is important in the event of a breach in the agreement. If you have to go to court to enforce your contract, the judge will only consider those terms that are actually written down. Anything else is parol evidence, and contract law forbids the court from considering it in most cases.

• If the transaction is important enough to require a contract, you should consider consulting an attorney. An experienced contract lawyer can help you avoid making costly mistakes.

References

• Klein and Wilson; The Parol Evidence Rule; Mark B. Wilson

Resources

• Read this Article in Spanish
• Findlaw: Breach of Contract and Lawsuits