As you know a contract is one of the most important factors that has to exist when two parties want to collaborate. This legal document indicates the expectations of both sides. It also states how to resolve negative situations. Since contracts are enforceable in the court of law you can always use them as a safeguard to protect your resources. In this article, we explain how you can write a contract which is legal and can save you from probable negative situations in the future.

What is a contract?

According to, a contract is ” A voluntary, deliberate, and legally binding agreement between two or more competent parties. Contracts are usually written but may be spoken or implied, and generally have to do with employment, sale or lease, or tenancy.
A contractual relationship is evidenced by (1) an offer, (2) acceptance of the offer, and a (3) valid (legal and valuable) consideration. Each party to a contract acquires rights and duties relative to the rights and duties of the other parties. However, while all parties may expect a fair benefit from the contract (otherwise courts may set it aside as inequitable) it does not follow that each party will benefit to an equal extent.”. The points mentioned here are the reasons why it’s truly important to write a contract.

How to write a contract

In order to be able to write a contract, first, you should know the key elements. Normally a contract needs to have three essential elements which are offer, acceptance, and consideration.

  • Offer consists of all the promises the offerer makes to the offeree in exchange for their promise to do or not to do something.
  • Acceptance refers to what the offeree gives the offerer as requested. It could be a promise to do or not to do something.
  • Consideration refers to whatever each party brings to the table in the bargained-for exchange.

Tips to make and write a solid contract

The most important thing would be to write a contract. Since this is a document you can keep and is safe so get it in writing. Keep it simple because by writing short clear sentences you can avoid any probable confusion. Don’t negotiate with the wrong person who is not in charge, always make sure the person you are dealing with has the authority to make decisions. Agree on circumstances that terminate the contract to set out the circumstances under which the parties can terminate the contract.

Learn how to write a contract

Learn how to write a contract

The three steps to take.

Whenever you want to write a contract you should take the following steps to be able to find the obligation in the parties’ interaction. If you can find the following points in a contract you are looking at an enforceable obligation.

  1. Make sure the contract provides the three key elements.
  2. Look for a claim based on reliance (also known as promissory estoppel), meaning that one party reasonably changed his position due to the other party’s promise and lost something as a result.
  3. Look for a claim based on restitution, meaning that one party conferred a benefit on another without intending it as a gift or forcing it on the other party.

Different types of contracts

There are different types of contracts but we can categorize them into four main types.

  • Written contracts
  • Verbal contracts
  • Standard form contracts
  • Period contracts.


Written contracts provide more certainty for both parties. When you write a contract you make sure there is no confusion and misunderstanding which reduces the risk of dispute. It’s always better that you get advice before you write a contract and sign it.

On the other hand, many independent contracting arrangements use verbal contracts, which only work well if there are no disputes. A handshake agreement may still be a contract and may (though often with difficulty) be enforced by a court. However, verbal contracts can lead to uncertainty about each party’s rights.

A standard contract is one which has been already prepared. Most of the terms are set in advance so there is little to no negotiation between parties.

Some independent contractors and hirers use a ‘period contract’. This is a contract template that sets out the terms for a business relationship where the contractor is engaged to perform work from time to time.  In the building and construction industry, these contracts are called ‘period trade contracts’.


Author Lily

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