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Writing a business contract is a detail-oriented task that requires the input of an experienced lawyer. You’ll need to work with a legal professional to navigate the nuances of drafting an agreement and build a solid business contract that functions as intended. A good attorney will also explain how to comply with prevailing business laws to ensure your contract is legally enforceable and reduce the likelihood of contract breaches or disputes. Regardless of the purpose of your contract, the following are some best practices to observe when creating it.

1. Put it in Writing

Although oral agreements may be legally binding in certain circumstances, they’re not easy to prove and enforce in court. Always ensure your business agreement is in writing and the terms are clearly spelled out and assented to by all parties involved. That way, it’s easier to prove and enforce the business agreement, protecting you better than a handshake or verbal agreement.

2. Keep It Simple

A good business contract should be simple and easy to understand. Avoid excessively technical terms unless necessary. Additionally, ensure there is no ambiguity and that the meaning of every word is clear.

3. Don’t Skip Important Details

Although it’s good to be brief, you should never compromise clarity. If any section of the business agreement is not easily understandable, break it down and address every detail no matter how small or inconsequential it seems. A great business contract should not leave room for interpretation. Ensure every term is plainly defined to ensure the opposition cannot dispute or twist the meaning in a court of law.

4. Identify Each Party Correctly

Be sure to include the correct legal names of all the parties to the contract to make it clear who is responsible for performing various obligations under the agreement. It should also be clear who you have legal rights against whenever things go wrong. For example, if you’re entering into an agreement with an LLC or corporation, you should identify the business by its correct legal name (including the LLC or Inc. suffix) rather than the names of the individuals signing on behalf of the business.

6. Specify Payment Obligations

Be sure to specify who pays whom, the conditions for making payments, and when the payments are due. Money is often a contentious issue, so sections outlining financial obligations should be very detailed. If payments will be made in installments or only when the work is completed, clarify these points and list fulfillment requirements, dates, and times. You may also include the method of payment as well.

7. Establish Conditions for Termination

Be sure to spell out under which circumstances any party can terminate the contract. This will help avoid legal disputes in the potential case that a party would like to exit the business agreement. Having a clause that spells out scenarios under which you can terminate the contract can help protect all parties involved.

8. Consult a Professional

Finally, always endeavor to seek a professional’s opinion when making a legally binding business agreement. An experienced business attorney can guide you and ensure you craft a watertight agreement.