How to Create Your Own Debentures Contract

A contract is a written agreement specifying the actions of two or more people.

Any contract other than one requiring property as collateral or permitting the placement of a lien is a debenture. You are very likely to enter into this general form of contract at some point in your life. Of course, with nothing other than the credit rating of the signer as a reason for security, a debenture can leave you in a very vulnerable position. To leave yourself able to cope with regrettable consequences from such an agreement, you will want to know at least some of the basics of contract writing.

Instructions

1. Make a list of any previous unexpected events in your experience responsible for the ending of such a contract or a disagreement on the meaning of its provisions. You will want to write specific clauses outlining the actions required of both you and the signer of the contract under each of these situations in order to spare yourself from facing the failure of further contracts for the same reasons.

2. Write the contract in simple sentences in active voice. To fulfill the contract, the other party will perform a specified set of actions, and so you will need to state them clearly. To establish a schedule for payment for instance, tell him simply to get the money in your hands by a specific date.

3. Negotiate the contract with people familiar to you. Such people are more likely to share your assumptions of the intent of the contract and the meaning of its specific clauses. This step will both reduce the number of conflicts over the meaning of the contract and permit for a quicker and complete resolution in the event of a court case over the contract. A judge, in ruling on either your or the other party's obedience to a contract, may assume both of you to be under the understood agreement rather than the written one. That pre-existing level of agreement may spare both you and the other party from having to make two separate explanations of your understanding.

4. Write the contract in the least specific terms possible. Regardless of the total number of clauses in your agreement, you and the other party may still find yourselves facing an unforeseen situation. During that situation you or the other party may prefer for the other party to take steps other than those specified in writing to uphold the expectations of the agreement -- rather than its specifications. A clause stipulating either of you from acting in the economic, social or personal hindrance of the other may cover many such possibilities.

5. Write a clause preventing any party from making a non-literal interpretation of the contract without the consent of the other party. This prevents either party to the contract from taking any actions detrimental to the other. This will give a court the clearest possible means to decide the propriety of a non-contractual action. It also forces both parties to communicate with each other in the event of conditions not already specified in the contract. It also gives a party acting in a non-contractual way the means to defend those actions legally by records of the other party's consent.

6. Keep records of the other party's actions in fulfilling the terms of the contract. Again, a court will judge your and the other party's obedience to a contract in terms of their fulfillment of an understood agreement rather than the written one. You will want to have evidence of his understanding of that contract in the event of a later claim to the contrary.

Tips & Warnings

• Consult an attorney before writing any contract

References

• Harvard Law School: Steven Shavell: On the Writing and the Interpretation of Contracts
• North Carolina State University: Tips on Writing Turf Contracts and Landscape Maintenance Specifications
• Cornell University Law School: Legal Information Institute: Debenture