How to Create Legal Contracts
People have been making contracts since the beginning of time. When two people agree to do things which are mutually beneficial, a contract of sorts (spoken, written or implied) has been created. In order for a written contract to be legal there are particular steps that need to be taken. For each party to be protected and to fairly benefit from the arrangement, there are details that should be included. Once the contract is signed by all parties, it becomes legally binding on all of them.
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Instructions
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How to Create Legal Contracts
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Plan a time to meet with all parties who will be involved in the contract. As you draft the details of your contract, you will want all parties to be in agreement.
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Consider purchasing a "Standard Contract" available at office supply stores. You can use this as a guide as you draft your own individual contractual needs. Some may even give you ideas for some standard clauses that all parties should generally be subject to.
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Date the contract on the day it is formed. This informs all participants of the date the negotiations associated with this contract were drafted. Use dates to specify the time frame in which various terms of the contract will be enacted. If necessary, include an extension clause for those circumstances that may warrant it. Include a final date at which point the contract becomes null and void should any or all terms fail to be met. Make sure each party dates the signature that he or she puts on the contract. Should any changes to the contract occur after the final signatures, initial and date them. Include all the dates necessary so that the final contract includes a specific time line of events.
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State within the contract the "consideration." For a contract to be legal it must include "consideration," which is generally a payment/money of some sort. It can also be a promise of service or benefit of some value. For example, if the contract is to purchase a car for $5,000, that amount is the consideration. The date at which consideration is due should also be included in the terms of the final contract.
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Include in the contract the names and addresses of the parties. Should changes be made to the contract, copies need to be sent by registered mail to all involved. Should a party of the contract relocate, the new address must to be sent to the other parties of the contract by way of registered mail.
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Include specific clauses to your particular contract. All contracts are different and specific to the needs and desires of those entering into the agreement. Include those specific details in your contract including times of completion so that your interests are secured. For example, if you contract to purchase a vehicle but you only want to buy it on the condition that it passes an inspection first, that should be clearly defined in your contract along with the time frame. Remember things like: the date that the 90 days begins, who will pay utility costs, the exact amount and date due of a security deposit, etc.
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Include the consequences a party will face should he/she disregard the stipulations of the signed contract. For example, record what penalty payment will be exacted for a late payment. An effective contract will include details for all contingencies.
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Sign the contract to make legally binding. Each party must sign and date the signature for it to be legal. In special cases, you may wish to have the contract notarized. This establishes proof that the parties signing the contract are who they claim to be.
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Tips & Warnings
If you have any questions or have concerns about being protected by a contract, consult with a lawyer before signing.
References
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