Contracts are a necessary part of doing business. They establish the terms of agreements between parties, outline expectations, and lay out consequences if those expectations are not met. In other words, experts like Carlos Urbaneja in Miami, FL, understand that contracts protect both businesses and consumers by setting clear guidelines that everyone must follow.
While most businesses understand the need for contracts, many need a clearer understanding of how to draft them. As a result, they either need to draft more complicated agreements or include key provisions that could protect their interests down the road. In this blog post, we will provide an overview of the dos and don’ts of contract drafting so that you can be sure your business is protected.
DO: Keep It Simple
The first step in drafting a contract is determining what needs to be included and what can be left out. In other words, you want to Include only the essential terms and conditions and leave out any extraneous language. The simpler the contract, the easier it will be to understand and enforce.
DON’T: Use Legalese
Carlos Urbaneja says while you want to keep your contract simple, you also want to avoid using jargon or “legalese.” Your contract should be written in plain English to be understood by everyone involved. If terms must be included for legal reasons, explain them in simple language.
DO: Make It Clear Who Is Involved
Every contract must include the full names and addresses of all parties involved. This may seem small, but it is essential for clarity and enforcement purposes. If there is a dispute about the contract, this information will be critical in resolving the matter.
DON’T: Be Vague About What Is Being Provided
Every good contract must include a clear and concise description of what is being provided. This sounds like a no-brainer, but you would be surprised how often this crucial provision is left out or phrased vaguely. The more specific you can be about what is provided, the better.
For example, if you are contracting for website design services, you will want to include a list of all deliverables, such as the number of pages, design elements, revisions, etc. This will help avoid disputes about whether or not the finished product meets your expectations.
DO: Set Expectations for Timeline and Payment
Every contract should include specific milestones for completion as well as payment terms. This will ensure that both parties are held accountable and that there is a clear understanding of when work should be completed and when payments are due.
The Essential Elements of a Contract
Carlos Urbaneja says every contract must have four essential elements to legally binding. These elements are offer, acceptance, consideration, and intention to create legal relations. Let’s take a closer look at each of these elements.
An offer is an expression of willingness to contract on specific terms, made with the intention that it will become binding as soon as it’s accepted by the person to whom it’s addressed (the offeree). For an offer to be valid, it must be unambiguous. It must also be communicated to the offeree so they can understand it.
For example, an offer made orally cannot be enforced if it wasn’t recorded in some way (e.g., via audio recording). Written submissions are generally preferable since there’s no risk of miscommunication or misunderstanding.
Acceptance is when the offeree communicates their consent to the offeror’s terms, creating a binding agreement between both parties. Approval must be unequivocal and mirror the terms of the offer. The offeree must communicate their acceptance to the offeror so they can understand it. As with offers, written acceptances are generally preferable.
Consideration is something of value (usually money) that both parties exchange for the contract to be enforceable. Consideration must be present for a contract to be formed—oral agreements are only enforceable if there was some form of consideration exchanged (e.g., one party paid money for goods or services). Without consideration, a contract cannot be enforced by law.
Intent to Create Legal Relations
Carlos Urbaneja says the final element required for a contract to be valid is an intention by both parties to create legal relations. This means that both parties must intend for the agreement to be legally binding and enforceable by law. If one party does not plan for the contract to be legally binding (e.g., they were just joking around), then the court will not enforce the terms of the agreement.
Drafting contracts can be straightforward if you know what to include (and what to leave out). By following these simple tips, you can be sure your business is protected without spending hours poring over legalese. And remember, if you’re ever unsure about something or don’t have the time, you can consult an experienced business attorney who can help you draft (or review) contracts that meet your specific needs.”