Contract Drafting
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Verbal agreements are only as effective as the parties using them. Due to the risks associated with running a business, you must put your contracts in writing. You’ll be glad you did if business disputes arise and the relevant contract comes into question.
The best place to start is by learning more about the process of contract drafting. Here’s everything you need to know:
What Is Contract Drafting?
Contract drafting is a form of legal drafting that involves writing contracts and legal documents. Contracts are legally binding documents that contain terms and conditions and other provisions. Poorly drafted contracts may result in unintended legal consequences, whereas well-structured ones can support profitable and secure business activities.
4 Requirements for a Valid Contract
The contracts your company uses will determine its success. Well-written agreements will protect your company’s rights and offer contingencies when things don’t go as expected. However, you must write a valid contract to utilize these benefits.
The four requirements for a valid contract are as follows:
Requirement 1. Offer
An offer is an acknowledgment that one party makes to the other. It signifies their ability and desire to carry out the contractual obligation. Offers usually include products and services being sold to an individual or entity.
Requirement 2. Acceptance
Acceptance is the other party’s acknowledgment that they accept the offer’s terms and conditions . Any changes to the existing request will require new acceptance from the receiving party. If they disapprove of amendments to the original contract, the element of acceptance goes unmet, and thus, rendering the contract invalid.
Requirement 3. Intent
Although a willingness to buy and sell falls under offer and acceptance requirements, both parties must intend to create a legal relationship. The element of intent means that they agree to carry out their legal obligations unless stated otherwise.
Requirement 4. Consideration
The exchange of consideration is the final component of valid contract requirements. Consideration is the exchange of something valuable with another entity to carry out the terms of the contract. Making a payment, trading equipment, and offering employee stock options for products and services are examples of consideration.
A signed contract carries several legal implications. Small businesses and startups should routinely incorporate these requirements into their contracts while seeking legal advice when questions arise.
Learn more about legal drafting .
How To Draft A Business Contract – Step by Step
Contract drafting is no easy task. While it may be tempting to download a boilerplate template online, we caution you to avoid making this a regular business practice. A contract is only as good as the language it contains, and a free online template will not satisfy your unique needs.
Here are the nine steps you should following when drafting a business contract:
- Step 1 . Determine the contract you need since the wrong agreement will not address your transactions’ unique needs.
- Step 2 . List party names, addresses, company names, and dates at the top.
- Step 3 . Create a statement that acknowledges both party’s consent to the terms and conditions contained within the contract.
- Step 4 . Make a list that describes what you give to the other party, such as services, products, and other promises.
- Step 5 . Draft a paragraph about how the other party plans to pay you for your services or products and the terms by which you will accept it.
- Step 6 . Insert standard provisions that protect your rights, such as nondisclosure agreements, choice of law clauses , and more.
- Step 7 . Write a brief statement about how both parties should handle a dispute, such as through traditional civil procedure or alternative dispute resolution
- Step 8 . Add signature and date lines for both parties to sign.
- Step 9 . Print or email your business contract for signing.
Poorly written contracts will result in additional problems should you get into a dispute with the other party. Ensure that you select the proper agreement for the given situation and always get legal advice when more advanced questions arise. This strategy is far cheaper than getting sued over unintended terms and conditions in your documents.
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Common Types of Business Contracts
Business contracts encompass a broad range of agreements. Consequently, it’s challenging for many business owners to know where to begin. The good news is that some arrangements are more common than others and may be the same solution that you need to move forward with your business relationship.
Common types of business contracts that your company can use include the following:
Asset Purchase Agreement
Asset purchase agreements (APAs) are contracts that outline the terms and conditions of purchasing a significant asset. These assets don’t include real estate transactions. The APA will protect your rights when purchasing intangible and tangible goods and services from another person or entity.
Consulting Agreement
Consulting agreements specify the provisions surrounding consultation services. These arrangements contrast sales contracts in that they essentially utilize terms and conditions related to the service industry. Consulting work of any kind should incorporate this type of agreement.
Employment Contract
Employment contracts detail the specifics related to their employment. Commonly used provisions related to compensation, dispute resolution, and confidentiality. These contracts are generally offered to new employees fulfilling key roles and positions within your organization.
Nondisclosure Agreement
Nondisclosure agreements (NDAs) restrict employees from divulging company secrets to external parties. These company secrets usually give the organization a competitive advantage. If the employee violates this covenant, the business owner then has the right to file a claim for damages.
Privacy Policy
Privacy policies let consumers know how you handle their personally identifiable information (PII) collected through websites and applications. These policies inform them of their rights, obligations, and how to opt-out of information-sharing efforts. They are commonly used in the technology sector today, and consumers now expect to see them.
Sales Contract
Sales contacts establish the terms of an asset sale. They lay the foundation for the exchange of consideration between a buyer and seller. Common provisions found in the sales contract include purchase price, delivery dates, and remedies for non-performance.
Service Contract
Service contracts offer a buyer and seller legal protections when engaging in a contractor or vendor relationship. Service contracts are different from employment contracts in that there are special rules surrounding these relationships. Check your local employment laws to determine how they affect your organization and contract drafting efforts.
Terms Of Service
Terms of service (ToS) is a contract found on most applications and websites. The software developer or website owner uses them to set expectations. A ToS will also ensure that you limit your legal and financial liability when people use your software.
Who Provides Contract Drafting Services?
Contract lawyers provide contract drafting services. They are the only professionals who are licensed and insured to offer legal advice. For example, lawyers are not allowed to make any legal mistakes, and if they make one in your contract that causes you damages, you can legally pursue a lawyer for a financial remedy.
Can I Draft My Own Contract?
It’s possible to draft your own contract. However, you should hire contract lawyers to draft your contracts for the same reason most people don’t fix their own cars. They will take on the liability of avoid legal mistakes while ensuring that your agreements are valid and enforceable.
If you need help with contract drafting, post a project in ContractsCounsel’s marketplace and get free bids from lawyers to review and compare. All lawyers in ContractsCounsel’s network have been vetted and include peer reviews for you to explore before hiring.
ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.
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Nicole C.
Nicole expertly and creatively works with businesses and individuals in all types of employment and business relations issues. She investigates workplace disputes as a neutral third party, drafts/reviews severance and hiring agreements, advises on day-to-day workplace issues, and reviews all kinds of business contracts. Nicole represents individuals, small businesses, non-profit organizations, labor unions, and benefits funds in various industries including public sector, entertainment, health care, education, transportation, construction, and communications. She has represented clients in federal and New York State courts, administrative proceedings, and arbitration hearings. Nicole is admitted to practice in New York.
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J.R. S.
Experienced Attorney with an MBA in Finance who provides a business-oriented mindset and thrives in a collaborative environment with a-typical challenges. Possesses exceptional skills in legal research, drafting and enforcing contracts, skillful in negotiations and mediations, drafts extremely persuasive pleadings, attacks depositions with zeal for my clients. Experience includes Business Management and IT Consulting with a successful track record managing outside relationships, associated costs, and optimizing outcomes for client(s). Effectively restructures antiquated business processes and incorporates technology and best practices to effectuate progressive outcomes for business clients. Partners collaboratively with business leaders to advance company objectives while minimizing risk to ensure internal and external compliance, increased profitability, and diverse practices. Dynamic communicator with the interpersonal skills to build trusting relationships with executives, management, and employees of various backgrounds, expertise, and styles.
"JR was fantastic. Quick to digest a complex, nuanced situation and generated an effective document as agreed-upon. Highly recommend!"
Tiffany O.
Tiffany received her Juris Doctorate from the J. Reuben Clark Law School, Magna Cum Laude. She is admitted to the Utah State Bar and the New Mexico State Bar. She practices in the areas of real estate, general business, business formation, employment agreements, and civil litigation.
"Overall great experience, Tiffany was very easy to work with even though we are in different time zones."
Brian J R.
Immigration expert with over 30 years’ experience focused on start-up companies H-1, L-1, E, O-1 visas. PERM and extraordinary ability immigrant visas. Complex family immigration cases and waivers. I also assist early stage comapnies in entity formation and general legal matters for start-up companies in the areas of Telehealth, Technology and International Trade.
Haroldo M.
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Elaine T.
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Zenaida R.
I am an active member of The Florida Bar, having successfully passed the Florida Bar Examination in September 2023. My legal career spans over seven years, beginning with extensive experience as a law clerk, where I supported attorneys and developed a strong foundation in client-focused legal work. I focus my own practice on business and estate planning matters, including entity formation, corporate governance and compliance, commercial transactions, and long-term planning for individuals, families, and business owners. My estate planning practice focuses on helping individuals and families protect their assets, plan for incapacity, and ensure their wishes are carried out with clarity and confidence. I regularly prepare wills, trusts, powers of attorney, health care directives, and related planning documents, and I take a personalized, practical approach to each plan—ensuring it reflects the client’s goals, family dynamics, and long-term needs while remaining fully compliant with Florida law.
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Alexander H.
I have been licensed to practice law in Florida since 1999. My work has centered on a wide range of family‑court matters, including divorce, child support, custody, paternity cases, and prenuptial agreements. I also handle broader family‑law services such as Last Will & Testaments, Powers of Attorney, and property‑related issues such as Quit Claim Deeds. In addition to family law, I have extensive experience in consumer bankruptcy law, such as Chapter 7 bankruptcy, and advising clients on issues such as wage garnishments, bank levies, foreclosure defense, repossessions, judgment enforcement, credit card lawsuits, and debt defense tactics. I regularly guide individuals on qualifying for bankruptcy, means‑testing, exemption planning, and strategies to protect assets in divorce and bankruptcy. I developed the Family Law and Bankruptcy Law courses for a law school, and I am the author of Consumer Bankruptcy Law for paralegals and legal professionals, published by Routledge. I also teach business law, economics of law, and bankruptcy in both English and Spanish for an international university.
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Ernestas P.
I am a broadly skilled legal professional. I am highly drawn to technology, fintech, intellectual property, privacy law, contracts. I am also experienced in business litigation and business transactions. I have been told to have the following skills perfect time management, critical thinking, problem solving, attention to detail, communication and decision making. As a former flight attendant, I am well versed and acquired many of those skills in a fast faced multicultural/multilingual setting. I am able to work solo or as a team member and quickly adapt to changes. Finally, I am fluent in English, Lithuanian, Russian.
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Scott B.
Scott Bowen, Esq brings legal experience in family law, special education law, and healthcare law matters. Scott also has over 20 years of expertise in healthcare compliance, medical coding, and healthcare consulting to the firm.
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Damian T.
Damian is a founding partner of Holon Law Partners. He began his career as an officer in the Marine Corps, managing legal affairs for his command in Okinawa, Japan. In this role, he conducted investigations, assembled juries for courts martial, and advised his commander on criminal justice matters. Damian was twice selected to serve as his unit’s liaison to the Japanese government and self-defense forces. Damian later worked as a transactional attorney in New York, where he handled commercial real estate, finance, and restructuring matters. He has also participated in insider trading investigations at the SEC, worked on compliance at a private equity firm, and managed legal operations and special projects at a vertically integrated cannabis company in New Mexico. Damian draws on these diverse experiences to provide his clients with creative solutions to thorny legal issues – from negotiating commercial leases to managing complex securities offerings. In addition to practicing law, Damian volunteers as a research assistant at the University of New Mexico Medical School’s McCormick Lab – studying the microbiology of longevity and aging. When not working, he enjoys spending time with his two pit bulls and pursuing his passions for foreign languages, art, philosophy, and fitness. Damian resides in Albuquerque, New Mexico.
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