Contract Drafting for Non-Lawyers: Simplifying Legal Language

Contract Drafting

Contract drafting through the spheres of verbal assurances given by the parties to one another is just the rapport made in plain English which cannot be considered a legal agreement in the eyes of the law. Moreover, considering a verbal agreement, the parties’ intention to enter an agreement cannot be concluded. Whereas, contract drafting through a Lawyer will foresee future issues and put the relevant clauses which will be privy to the agreement.

If a lawyer does not draft the internal agreements in the company, there is a high chance that the agreement itself is unclear; the provisions might be a reflection of some of the terms of any oral agreements that may have existed. Such kind of contract drafting will lead to irrelevant boilerplates, indifference in the clauses and the maximum use of jargon if the written contract does not specify the conditions or inadequately defines the performance of duties.

Therefore, it is crucial to distinguish between a written contract, in which the agreement is reduced to writing, and an oral contract that is supported through a document, and the writing just serves as proof that an oral contract has been made.

Another method of exhaustive contract drafting services which are available through the mode ‘Do It Yourself’, can be preferred. ‘Do it Yourself’ services may only be opted when the agreement necessitates the drafting of general terms and conditions between the parties. The drawbacks of ‘Do it Yourself’ services are that it may sometimes leave the contract unenforceable, as it may miss out on key clauses or may even generate further legal obligations.

What is Contract Drafting?

Writing down an agreement’s terms and conditions is the process of contract drafting. It aims to produce a legally enforceable written document that is crystal clear, succinct, and as near to the parties’ objectives as is practical. Regardless of their field of specialisation, contract drafting is one of the fundamental abilities that all attorneys are supposed to have.

Requirements of Valid Agreement/Contract?

  • Offer: A person makes an offer when he evinces an intention to be bound by clearly ascertainable terms and to be so bound as soon as the person to whom the offer is addressed signifies his acceptance.
  • Acceptance: An offer does not ripen into a binding agreement until accepted by the offeree. Acceptance involves an unconditional expression of assent to the terms of the offer. An acceptance is a final and unqualified expression of assent to the terms of an offer.
  • Intent [Element of ‘Good Faith’ in contract drafting]– Intent in contract drafting necessitates an accurate and sincere evaluation of rights and duties, and it demands that a party bargain considering such a deal. For example, a party may not be allowed to use the fear of a future breach of contract as leverage to get a settlement that is less than what it honestly believes is due. That would probably not reflect fidelity to the bargain of a Party.
  • Consideration: Consideration’s fundamental idea is that each promise must be made for a specific purpose in exchange for which the offer is being made. For a promise to be legally enforceable, the promisee must provide something, act, or refrain from doing in exchange for the promise made to him. Consideration involves either some detriment to the promisee or benefit to the promisor.

How To Draft a Business Contract Step by Step

  1. Determination of Agreement for Contract Drafting

    Choosing the right document and the problems it needs to solve is the first step in contract drafting. If your business is bigger, hire a contract worker to assist your legal team. For a better outcome, smaller businesses should carefully weigh their alternatives and invest the time to learn about contract negotiations and rules that are relevant to their sector.

  2. Pre-Draft Planning

    Pre-draft planning entails the first legal writing of your agreement. Review the list of items in a business contract to learn about the many terms and conditions found in most commercial agreements. Make sure you negotiate terms that are reasonable and fair to all sides.

  3. Get it in Writing

    Every time you make a commercial agreement, you should have written documentation of the transaction that details the obligations of each side. Although oral agreements are common in business company settings, they are challenging to execute because of human memory flaws and the ease with which terms might be misunderstood.

  4. Legalese Language

    Contract drafting should be done so that its “legalese” should be reflected in the language. The finest contracts are drafted in straightforward English so that both parties know what they are signing and what the conditions imply.

  5. Describe in detail what you have agreed to

    Specify the goods or services which the parties have considered or are in terms of being exchanged for consideration. Indicate in writing what each party agrees to deliver and what the other is willing to pay for or provide.
    The contract draft should specify the services that will be rendered; who will provide the services, for whom, when, where, and for how long? What will the individual receive in exchange for their services?

  6. Include Payment Details

    It’s important to define the payment method. Declare this with the conditions under which you will release payment if you want to pay half up front and the other half in equal payments throughout the contract. The payment terms will also include the methods through which the payments will be made with the schedule of the payments.

  7. Consider Confidentiality

    In business agreements, it’s common for the other party to have access to and knowledge of your operational procedures and potentially sensitive trade secrets; you should insert a provision that forbids them from telling anybody else about your company or any information contained in the contract.

  8. Include clauses on the termination of the contract

    Contracts are not entered to be perpetual. You want a system in place so that you may simply end the contract if one party consistently misses payments or fails to fulfil their obligations. This may include a time for termination or termination by missing out on any obligations.

  9. Consider Applicable Laws Governing the Contract

    Contracts can specify which state’s laws, in the case of a disagreement, shall apply. Include a language stating which state laws will apply if the other party is situated in a different state.

  10. Protection

    The contract’s obligations may be missed due to conditions outside the party’s control. Therefore, it is essential to mention the situations in which the obligations will not impact the parties. This can also be forwarded with the indemnity to safeguard a party. Protection by way of compensation may also be added as damages.

  11. Arbitration and Mediation

    It may be helpful to add a clause requiring the parties to participate in arbitration, mediation, or both in the case of any disagreement.

  12. Execution

    The contract is enforceable when all the parties execute it by putting up their signatures or seals.

Common Type of Business Contract

(a)  Asset Purchase Agreement: An asset purchase agreement is a legal contract to purchase a company’s assets. It can also be used to buy specific assets from a company, particularly if they have a high value.

(b)  Consulting Agreement: It engages a consultant and outlines the scope of work to be performed by them and other terms and conditions related to their appointment in the company.

(c)  Employment Contract: It is an agreement between the new employee and the employer and outlines the rights, responsibilities, and obligations of both the employee and the employer.

(d)  Non-Disclosure Agreement: It is a legal contract used to protect sensitive information that needs to be shared with others.

(e)  Privacy Policy: It is a legal document that outlines where you disclose or, at minimum, what personal information you collect from your users, how you collect the information, how you use it, and whether you share it with any third parties.

(f)  Sales Contract: It is a kind of agreement where parties are involved in exchanging money for goods, services, and/or property.

(g)  Terms of Service: It is a legal document that details what a service provider is responsible for and user obligations that must be adhered to continue the service.

Contracts often contain specific terms and conditions. Some others common contract drafting terms and conditions are:

  1. Force majeure clause
  2. Arbitration clause
  3. Indemnification
  4. Assignment
  5. Confidentiality
  6. Warranties
  7. Choice of law and forum selection
  8. Time is of the essence clause
  9. Severability
  10. Liquidated damages clause

Who Provides Contract Drafting Services?

A law firm or corporate attorney provides contract drafting services. They help with the preparation of a contract and ensure its legality. Custom contract drafting services cover all commercial areas as contracts come in various forms, and they are divided into categories based on the type of business activity involved and the intended use of the contract.

Can I draft my contract?

Anyone may draft a contract on their own, and as long as the lawful components are there, both parties are legally competent and consent to the terms of the contract, it is usually valid. The services of ‘Do It Yourself‘, which includes contract drafting services, are offered by most of the Law firms and Attorneys. They are also available on online legal service providers where you can put in the required details and draft your contract.

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