Need a make a contract for your next project? Smart move. A well-crafted legal agreement ensures both parties are on the same page while protecting their rights.
The article below outlines what you need to know about making a written contract:
What Is a Written Contract?
Written contracts are legally binding documents between two businesses for defining a contractual relationship. You can use these legal documents to address relationships, sales, transactions, and more. Contract drafting skills are essential when making an agreement since legal mistakes may result in unintended future consequences.
How To Make a Contract – Step by Step
Making a contract starts by understanding the particulars of the agreement and how local contract laws apply. Misapplication can result in costly legal mistakes. Ensure you have a solid approach in place for each and every agreement.
Here’s a general step-by-step process for making a contract:
Step 1. Identify the Parties and Contract Start Date
Written agreements must explicitly identify the contracting parties. Ensure that yours include the following details at a minimum:
- Business name
- Contact information
- Mailing and physical address
- Primary contact name
You should also add the agreement date. The agreement date indicates when the contract started, which is typically the signing date.
Step 2. Define Project Scope and Conditions
Contracts are akin to the “fine print” of your relationship with the other party. Your agreements must be as transparent as possible. The objective is to establish defined expectations.
While it may seem excessive, it is critical for you and your clients to delve into those precise specifics. You don’t want to feel obligated to work outside of scope, and you certainly don’t want your customers to believe they aren’t receiving for what they paid. Negotiate business contracts thoroughly to avoid this situation.
Step 3. Set Terms of Consideration
Consideration is the compensation you give or receive in exchange for products or services, typically in the form of cash, equity, or other assets. There are several factors to consider when setting payment terms in your written contracts , including:
- Billing practices
- Hours available
- Payment schedule
- Project deliverables
- Service hours worked
Step 4. Describe the Project’s Timeline
You’ll also want to explicitly define any project deadlines, such as project milestones and final deliverables. If the client supplies materials, explain what you need and the deadline by which you require it. Get as detailed as possible about the project timeline to help prevent disputes.
Step 5. Add provisions that Protect Your Rights
Projects don’t always go as planned. You’ll want to make sure your company is protected if something goes wrong.
Several clauses can help you achieve this objective, such as:
- Termination clause
- Intellectual property (IP) rights clause
- Taxation clause
- Choice of law clause
- Dispute resolution clause
After drafting your contract, it’s ready for signing. Contracts are only valid if all parties sign them.
Here’s a pro tip : get your contracts signed in blue ink and retain the original so it’s more challenging for the other party to dispute the contract’s validity.
What’s Typically Included in a Contract?
Almost every industry uses contracts . Their options and flexibility allow businesses to create clauses that are applicable across multiple sectors. However, you should always seek legal advice for company, industry, and transaction-specific clauses.
Below, we have listed five provisions found in most contracts as well as how they work:
Term 1. Confidentiality
Confidentiality provisions prohibited one, some, or all parties from divulging specific information, such as trade secrets and intellectual property. This clause will also allow an aggrieved party to pursue damages should this situation arise.
Term 2. Contract Damages
Use damages clauses to deter other parties from breach of contract actions. You can stipulate that events, such as failure to perform or deliver, can result in other liquidated damages as a penalty.
Term 3. Dispute Resolution
Dispute resolution clauses detail a party’s options if a conflict arises. You can specify that parties file a claim in civil court or attend mediation or arbitration. These types of alternative dispute resolution (ADR) tend to be faster, cheaper, and off of public records.
Term 4. Force Majeure
Force majeure is a concept that protects parties from situations beyond their control. These situations usually include “acts of God,” natural disasters, and pandemics. Your force majeure clause ensures that you are not responsible for breaches related to these events.
Term 5. Governing Law
Governing law clauses establish which jurisdiction’s rules apply to the agreement. Companies most commonly set the governing laws as the same location as their headquarters.
Common Types of Contracts
Contracts address a wide range of personal and commercial transactions. Some are more common than others. While contact titles are usually self-explanatory, their nuanced uses aren’t always readily apparent.
Reviewing the list of common contract types below to learn more about which one is right for your needs:
Type 1. Asset Purchase Agreement
Asset purchase agreements (APAs) are contracts that exist between a buyer and a seller. They transfer asset ownership in exchange for compensation. The seller has control over which assets to sell and which to keep.
Type 2. Commercial Lease
Commercial leases are agreements between a property owner or manager and a business tenant. The property owner signs the agreement as the lessor, and the tenant is the lessee. Upon activation, the lessee has rights and obligations to uphold.
Type 3. Confidentiality Agreement
Confidentiality agreements are contracts that require one or more parties to keep proprietary information confidential. Employers typically use these agreements within the context of an employee or vendor relationship. An example of a confidentiality agreement is a non-disclosure agreement .
Type 4. Joint Venture Agreement
Joint venture (JV) agreements exist between two parties to achieve a common goal. You should include details, such as members, responsibilities, goals, and project dates. Unlike a partnership agreement, JV agreements only last until the end date.
Type 5. Partnership Agreement
Partnership agreements , also known as partnership contracts, are contracts between two or more people who want to collectively manage and operate a business for profit. Each partner is personally or professionally liable for the partnership’s debts. However, they also share a portion of the partnership’s profits and losses.
Type 6. Sales Contract
Sales contracts exist between a client and company when selling an asset. These agreements assure both parties that delivery will occur in exchange for payment. Upon satisfaction of contractual obligations, the client becomes the owner of the new asset or property.
Type 7. Service Contract
Service contracts are similar to sales contracts. However, instead of describing the details of the sale of a product, they relate to services offered by a business. For example, landscapers and web designers routinely use service contracts throughout their business.
Contract Creation Fees
The below legal contract drafting fee data comes from ContractsCounsel’s marketplace. The table includes 12 popular legal contract projects.
Document Type | Bid Avg | Project Avg |
Service Contract | $650 | $505 |
Partnership Agreement | $875 | $625 |
Single-Member Operating Agreement | $525 | $450 |
Multi-Member Operating Agreement | $1,100 | $950 |
SaaS Agreement | $850 | $725 |
Terms of Service | $845 | $450 |
Privacy Policy | $500 | $450 |
Employment Contract | $650 | $500 |
Consulting Agreement | $650 | $450 |
Contractor Agreement | $650 | $450 |
Convertible Note | $650 | $550 |
Promissory Note | $695 | $550 |
All data is flat-fee (not hourly), so the pricing you see below is the total to complete a project. Please note, pricing for making a contract can vary based on document type, number of custom terms, and number of revisions needed. The above pricing table includes averages.
How Long Does It Take to Make a Contract?
It takes between a week and a few months to make a contract. However, the time it takes you to make a contract depends upon several factors, including project scope, jurisdiction, and the number of parties involved. A contract negotiation and management strategy can help mitigate inefficiencies.
Can I Make My Own Contract?
You can definitely make your own contract! The most practical approach is working with business lawyers from the outset. A signed contract carries legal implications, which means you should understand your rights and obligations for a better result.
Do you need help making a contract? Post a project in ContractsCounsel’s marketplace to get free bids from quality lawyers to review and compare. All of the lawyers in ContractsCounsel’s marketplace are vetted by our team and peer reviewed for you to explore before hiring.
Meet some of our Make Contract Lawyers
March 11, 2021
Benjamin W.
I am a California-barred attorney specializing in business contracting needs. My areas of expertise include contract law, corporate formation, employment law, including independent contractor compliance, regulatory compliance and licensing, and general corporate law. I truly enjoy getting to know my clients, whether they are big businesses, small start-ups looking to launch, or individuals needing legal guidance. Some of my recent projects include: -drafting business purchase and sale agreements -drafting independent contractor agreements -creating influencer agreements -creating compliance policies and procedures for businesses in highly regulated industries -drafting service contracts -advising on CA legality of hiring gig workers including effects of Prop 22 and AB5 -forming LLCs -drafting terms of service and privacy policies -reviewing employment contracts I received my JD from UCLA School of Law and have been practicing for over five years in this area. I’m an avid reader and writer and believe those skills have served me well in my practice. I also complete continuing education courses regularly to ensure I am up-to-date on best practices for my clients. I pride myself on providing useful and accurate legal advice without complex and confusing jargon. I look forward to learning about your specific needs and helping you to accomplish your goals. Please reach out to learn more about my process and see if we are a good fit!
March 12, 2021
Ema T.
I am a NY licensed attorney experienced in business contracts, agreements, waivers and more, corporate law, and trademark registration. My office is a sole member Law firm therefore, I Take pride in giving every client my direct attention and focus. I focus on getting the job done fast while maintaining high standards.
April 1, 2021
David B.
A twenty-five year attorney and certified mediator native to the Birmingham, Alabama area.
April 6, 2021
Rebecca L.
I absolutely love helping my clients buy their first home, sell their starters, upgrade to their next big adventure, or transition to their next phase of life. The confidence my clients have going into a transaction and through the whole process is one of the most rewarding aspects of practicing this type of law. My very first class in law school was property law, and let me tell you, this was like nothing I’d ever experienced. I remember vividly cracking open that big red book and staring at the pages not having the faintest idea what I was actually reading. Despite those initial scary moments, I grew to love property law. My obsession with real estate law was solidified when I was working in Virginia at a law firm outside DC. I ran the settlement (escrow) department and learned the ins and outs of transactions and the unique needs of the parties. My husband and I bought our first home in Virginia in 2012 and despite being an attorney, there was so much we didn’t know, especially when it came to our HOA and our mortgage. Our real estate agent was a wonderful resource for finding our home and negotiating some of the key terms, but there was something missing in the process. I’ve spent the last 10 years helping those who were in the same situation we were in better understand the process.
April 15, 2021
Samantha B.
Samantha has focused her career on developing and implementing customized compliance programs for SEC, CFTC, and FINRA regulated organizations. She has worked with over 100 investment advisers, alternative asset managers (private equity funds, hedge funds, real estate funds, venture capital funds, etc.), and broker-dealers, with assets under management ranging from several hundred million to several billion dollars. Samantha has held roles such as Chief Compliance Officer and Interim Chief Compliance Officer for SEC-registered investment advisory firms, “Of Counsel” for law firms, and has worked for various securities compliance consulting firms. Samantha founded Coast to Coast Compliance to make a meaningful impact on clients’ businesses overall, by enhancing or otherwise creating an exceptional and customized compliance program and cultivating a strong culture of compliance. Coast to Coast Compliance provides proactive, comprehensive, and independent compliance solutions, focusing primarily on project-based deliverables and various ongoing compliance pain points for investment advisers, broker-dealers, and other financial services firms.
April 19, 2021
Pritesh P.
Experienced General Counsel/Chief Legal Officer
April 21, 2021
Richard G.
Attorney Gaudet has worked in the healthcare and property management business sectors for many years. As an attorney, contract drafting, review, and negotiation has always been an area of great focus and interest. Attorney Gaudet currently works in Massachusetts real estate law, business and corporate law, and bankruptcy law.
July 7, 2021
Benjamin E.
Benjamin is an attorney specializing in Business, Intellectual Property, Blockchain, and Real Estate.
June 8, 2021
Ayelet F.
Ayelet G. Faerman knows what influencers mean to brands today. With experience as legal counsel for a beauty brand for over 5 years, and overseeing multiple collaborations, Ayelet has experienced the rise of influencer marketing. As the founder and managing partner of Faerman Law, PA her practice focuses on influencer relations including a specialization in contract negotiations.
May 12, 2021
Robert D.
I am a general practice lawyer with 21 years of experience handling a wide variety of cases, both civil and criminal
May 27, 2021
Melissa G.
Melissa D. Goolsarran Ramnauth, Esq. is an experienced trial-winning trademark and business attorney. She has represented large businesses in commercial litigation cases. She now represents consumers and small businesses regarding federal trademarks, contracts, and more. Her extensive litigation knowledge allows her to prepare strong trademark applications and contracts to minimize the risk of future lawsuits.