Regardless of the type of contract, there are certain tips that can help make a contract stronger and more enforceable. These tips can be used by anyone to enhance an already existing contract or guide the drafting of a new contract.
1. Get it in Writing!
Certain contracts must be in writing in order to be enforceable. Agreements for the sale of real estate and contracts for the consideration of marriage are just a few examples of contracts that must be in writing. However, even when it is not required, a contract should always be in writing. It increases the clarity and understanding between the parties, managing expectations and reducing the likelihood of a dispute. In addition, a written contract provides evidence of any agreements if the relationship should result in litigation or a dispute. Aside from the legal implications, well-written contracts help to improve a business's image. By using clean and concise contracts, a business is highlighting its professionalism and knowledge within its industry.
2. Use Simple Language
Despite the prevailing trend of turning contracts into Latin dissertations, simple language is actually preferred in a contract. Using conversational language instead of legalese helps to increase the clarity in the contract and avoid misunderstandings. Good writing practices like using simple sentences, writing out contractions, and employing bullet points can all assist in making the contract stronger. By using simple language, the contract becomes one more polished form of communication with the opposing party, instead of just another contract.
3. Clearly Identify the Parties
Although it may seem obvious, many contracts fail to clearly identify who the contract is pertaining to. The "who" is just as important as the what, where, when, and why in a contract. Therefore, consistency in the names and references to the parties is essential in clearly understanding who is bound by the agreement. It is highly advisable that pronouns are avoided, but if they are necessary, consistency is a must.
4. Focus on the Details
Many times, the disputes that arise out of contracts revolve around the parties misunderstanding of the details of the contract. When drafting an agreement, the majority of the time should be spent on the specific details of the contract. Spell out the numbers, as well as writing them numerically. Anticipate accidents, mistakes, and other breaches and how they will be handled. Be vague when it benefits you and specific when it doesn't. Read, read, and re-read the language. TIP: When editing, read the sentences backward.
5. Think About the Break-Up
Just like in romance, no one wants to talk about the end of a relationship. However, this is exactly the time to discuss what will happen if the relationship goes south. Everyone is happy and excited about the future; your minds are open and willing. A clear and concise exit strategy may be the difference between saving a future business relationship and losing one.
6. Talk About What Happens if You Don't Agree
Disagreements in any relationship are inevitable. And, these disagreements are exactly what contracts are designed to address. Especially in business contracts, provisions that address deadlocks are imperative. By anticipating the fact that there will be times when all of the parties do not agree, a contract can provide for a seamless and effective way to resolve the disagreements before they become fatal to the relationship.
7. Provide Background
If you have ever read a contract, you may have noticed a section titled "Recitals." This section is the story of the contract. It sets the stage for the agreement and highlights why the parties are contracting in the first place. Recitals can include background information, an explanation of the parties, and the purpose of the agreement. Recitals assist in providing more clarity for the parties and serve as a reminder to everyone involved as to the purpose of the contract.
8. Define, define, define!
The definition section of a contract is one of the most important parts of any contract. There are a number terms in every agreement that have a specific meaning. Certain industry terms may have one meaning to the outside world, but a completely different meaning to the parties to the contract. Defining these terms allows for a simpler cleaner contract and highlights the drafter's attention to detail.
9. Remember That You Will be Bound by all of the Terms Too
Many times, contract provisions are written with only the opposing party in mind. This is a mistake. When drafting any agreement, remember that you will be bound by the terms, as well. Therefore, review all of the provisions as if they were being used against you to determine whether the result works in your favor.
10. Have an Attorney Review
Any contract will become stronger and more secure after it has been reviewed by an attorney. An attorney, licensed to practice in your state, will have an understanding of the most recent laws and cases, impacting your contract and industry. Additionally, most attorneys have had the dissatisfaction of seeing the fallout of a poorly written agreement and will be able to help you avoid those same results. Enlisting the help of an attorney to review your agreement before it is finalized can, at a minimum, help you can sleep at night!
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