How to Draft a Commercial Contract
There are no perfect contracts. However competent the attorney drafting the contract, something will invariably arise that wasn't foreseen. What is critical in any agreement is a "meeting of the minds." The parties must at least agree on the basic terms of the agreement and consent to them. If one term is not explicitly stated in the written agreement, a court may imply terms in litigation, but it is best not to rely on what a court may later imply. It is best to spell out all terms in the written agreement.
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Instructions
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Drafting the Agreement
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Meet with your client and discuss the terms of the agreement. Ask questions such as: What does he want in the contract? What is the subject matter of the contract? What amount of money will he require to perform his end of the bargain? What are his time constraints? What is the formal name of the company or individual that will perform the work? Where is the work to be performed?
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2
Discuss breach provisions with your client -- what happens if the parties break the contract. Tell them which state law applies. Talk about other issues such as insurance and bonding.
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3
Specify the parties to the contract. Include the formal business name of your client or his company and do the same with the other party.
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Specify the subject matter of the agreement. Include the services to be performed or the goods to be delivered. State the responsibilities of both parties.
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Specify the amount to be paid. Discuss remedies such as penalty provisions to be applied in the case of late payment or breach. Include a provision allowing your client to stop work if payment is late.
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Specify the schedule for performance. Make sure to schedule extra time in case the unforeseen happens and the project is slowed. Specify two days even if performance usually requires only a day, schedule eight weeks even if the work can be done in four weeks. Schedule only the time for performance in case of some type of performing arts agreement. Include a place for the signing date and signature at the end of the agreement.
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Specify the place for performance by including a specific address. This address may be a receiving address, shipping address, construction site, or concert hall, depending on the type of contract.
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8
Contact the other party and send them a copy of the draft agreement. Request that they accept it as presented. In the likely event that they refuse, meet with your client and the other contracting party and her attorney to negotiate the terms of the contract. Note changes and additions to which both parties consent. Incorporate those changes into the final commercial contract.
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