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|
|Single-Member Operating Agreement||$525||$450|
|Multi-Member Operating Agreement||$1,100||$950|
|Terms of Service||$845||$450|
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
Experienced Attorney focused on transactional law, payments processing, banking and finance law, and working with fintech companies with a demonstrated history of driving successful negotiations in technology sourcing and transactions and strong understanding of government contracts and the procurement process
Seasoned negotiator, mediator, and attorney providing premier legal advice, services, and representation with backgrounds in education, healthcare, and the restaurant and manufacturing industries
I am an experienced technology contracts counsel that has worked with companies that are one-person startups, publicly-traded international corporations, and every size in between. I believe legal counsel should act as a seatbelt and an airbag, not a brake pedal!
Attorney (FL, LA, MD) | Commercial Real Estate Attorney and previous Closing Manager (Driving Growth from $10M to $50M+/month).
John Daniel "J.D." Hawke is an experienced attorney with a law practice in Mobile, Alabama. He was born in Fairhope, Alabama and after earning his undergraduate degree at Auburn University, he received a law degree from Thomas Goode Jones School of Law in 2010. After law school, he formed the Law Office of J.D. Hawke LLC and over the last decade he has fought incredibly hard for each and everyone of his clients. His practice focuses on representing people facing criminal charges and clients dealing with family law matters. In addition to criminal defense and domestic relations cases, he also regularly handles contract disputes, personal injury cases, small business issues, landlord/tenant disputes, document drafting, and estate planning. He is licensed to practice law in the State of Alabama and the United States District Court for the Southern District of Alabama.
Thomas Codevilla is Partner at SK&S Law Group where he focuses on Data Privacy, Security, Commercial Contracts, Corporate Finance, and Intellectual Property. Read more at Skandslegal.com Thomas’s clients range from startups to large enterprises. He specializes in working with businesses to build risk-based data privacy and security systems from the ground up. He has deep experience in GDPR, CCPA, COPPA, FERPA, CALOPPA, and other state privacy laws. He holds the CIPP/US and CIPP/E designations from the International Association of Privacy Professionals. Alongside his privacy practice he brings a decade of public and private transactional experience, including formations, financings, M&A, corporate governance, securities, intellectual property licensing, manufacturing, regulatory compliance, international distribution, China contracts, and software-as-a-service agreements.
Attorney of 6 years with experience evaluating and drafting contracts, formation document, and policies and procedures in multiple industries. Expanded to estate planning last year.
George is a lifelong Houston resident. He graduated from St. Thomas High School and then Texas A&M University. He obtained his Doctor of Jurisprudence from South Texas College of Law in 2007. He is experienced in real estate, estate planning & probate, civil/commercial matters, personal, injury, business matters, bankruptcy, general counsel on-demand, and litigation. He is active in the community serving as past-president of the St. Thomas Alumni Board, a current member of the Dads Club Aquatic Center Board of Directors, current member of the Dickinson Little Italy Festival of Galveston County Board of Directors, and former PTO President for Briarmeadow Charter School.
My clients are often small and medium size technology companies, from the "idea" stage to clients who may have raised a round or three of capital and need to clean up a messy cap table. I help with all legal matters related to growth that keep founders up at night - hiring people, allocating equity, dealing with shareholders and investors, client negotiations and early litigation counseling (before you need a litigator). I've seen a lot, and because I run my own business, I understand the concerns that keep you up at night. I’ve been through, both on my own and through other clients, the “teething” pains that will inevitably arise as you scale-up – and I’m here to help you. I have over 20 years international experience devising and implementing robust corporate legal strategies and governance for large multinationals. I now focus on start-ups and early/medium stage technology companies to enable a sound legal foundation for your successful business operations. Many of my clients are international with US based holding companies or presences. My 17 years abroad helps me "translate" between different regimes and even enabling Civil and Common Law lawyers to come together. Regularly, I handle early stage financings including Convertible Notes, Seed and Series A/B financings; commercial and technology contracts; international transactions; tax; mergers and acquisitions.
Sammy Naji focuses his practice on assisting startups and small businesses in their transactional and litigation needs. Prior to becoming a lawyer, Sammy worked on Middle East diplomacy at the United Nations. He has successfully obtained results for clients in breach of contract, securities fraud, common-law fraud, negligence, and commercial lease litigation matters. Sammy also counsels clients on commercial real estate sales, commercial lease negotiations, investments, business acquisitions, non-profit formation, intellectual property agreements, trademarks, and partnership agreements.