Nine Things to Know When Drafting a Contract
Everyone needs a contract these days whether they are individual or business. They know that they will be vulnerable to frauds and scams if they don’t protect themselves legally. If it’s not written, the other party will challenge every single word they said. They might even say that they have already paid you or submitted what they promised when in fact they didn’t.
You could go to the police but they will just have to decide who is lying and who is telling the truth. That won’t be a problem if you write a clear contract that mentions everything regarding the project so all understandings are available in written form. Here is what you should know when drafting a contract.
Consider the Language
You might not always be doing business with someone who is from the same region as you. Most businesses now operate online and consider the entire world their target region. This means you will have to consider the values of every region when getting into business with them.
This includes writing a contract that is understandable for them. You can’t just hire anyone to translate the contract. It has a legal language that can only be translated by some professional like Logic’s legal service. This ensures that there is no room for confusion or ambiguity in sentences after they have been translated.
Ensure Parties are Over 18
You can’t finalize a contract with a kid. While different countries and states have different laws, you should if you can hold the other party accountable in case things don’t go the way they are supposed to be. If you get in business with someone who can’t be held legally liable, there is no point in writing in contracts. This is why you should have ID numbers of everyone who is an actor in the transaction and you must ensure that they are adults and responsible.
Clearly Mention the Consideration
You should clearly mention what is being offered and in return for what. If you specify what you are getting or giving in return for what, it will be treated as a promise, which has no holding in court. If you are getting a product or service, the contract should mention what compensation you are paying for it.
Decide the Terms
It is important to discuss and then write all the terms and conditions. You should think about every possible problem that could come your way and how you are going to deal with it. For example, if a party fails to deliver what was promised on time, you could hold them liable for a fine or refund, which would be mentioned in terms and conditions. All the veteran companies always include things related to the quality of product or service and the conditions under which there may be some leniency.
Add the Confidentiality Clause
It’s important you always mention a clause for confidentiality even if you don’t have anything very sensitive. It enables you to protect your company’s resources and plans. There might not be a business out there trying to damage you, but that information can give them a competitive advantage. No one should know who you are working with and how much you are paying for anything.
They might also start following the things you have learned with your experience over the course of years. Your competitors could use that information to strengthen their own business that you had to learn a lot of mistakes and experimentation to learn.
When a Clause is Breached
You should define actions and penalties if one or more clauses are breached. If there is no penalty defined, any party can keep breaking any agreement without having to worry about consequences. You should mention if they will be fined for something or when the agreement will be canceled.
It should also discuss if the contract is prematurely canceled and how it will be determined who was at fault and who will take responsibility and how. You can mention this with each clause or at the end of the contract, but it’s important that it is mentioned clearly without any ambiguity.
It Must be Legally Binding
A contract is supposed to be legally binding otherwise it won’t have any value in court. It won’t matter if the entire document is perfect but just one clause discusses something that can be legally forced; the entire contract would be considered null and void.
One thing that you must watch out for is the mention of anything illegal. For example, no matter what, you can take anyone’s basic human rights no matter how damaged they have done and even if they have given you permission for that in writing. To ensure nothing is illegal even after it’s translated into different languages, you should take the help of professionals from the Logic.
Must be Signed from Both Parties
A contract is only binding when both parties agree to it. To show that every involved actor is aware of every clause and agreement, he must read it carefully and sign it. The signature shows the willingness to agree to everything in the contract, and it is automatically assumed that they read the contract before signing it. No one can later say that they didn’t read the contract. Their signature is proof that they willingly got involved in the agreement.
Review with Every Counteroffer
Every time a new counteroffer is made, you should not continue with the same contract. It could cause issues later if you don’t revise every clause according to the new offer. One ambiguity is more than enough to compromise the integrity of the entire contract. No one should have to say that things are different because a certain new offer was made.
Furthermore, it is important that you mention the date when the contract was accepted by all parties. The date holds a crucial place in determining when it all began and when what actions led to the termination of the agreement. The dates should be updated according to the new counteroffer.
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