How to Write a contract: 7 Simple Steps Anyone Can Follow

The Real Talk on Contract Writing

Writing a contract doesn't require a law degree or a $500-per-hour attorney. In fact, 73% of small businesses create their own basic agreements, and with the right approach, you can too. The key is understanding what makes a contract legally binding and knowing when to keep it simple versus when to call in the professionals.

Here's everything you need to know about writing contracts that actually protect you without breaking the bank.

What Makes a Contract Legally Binding?

Before diving into the how-to, let's get clear on what you're actually creating. A contract is simply a promise between two parties that can be legally enforced. For it to hold up in court, it needs four essential elements:

Offer and Acceptance: One party makes an offer, the other accepts it. Simple as that.

Consideration: Both parties get something of value. This could be money, services, products, or even a promise to do (or not do) something.

Legal Capacity: Both parties must be legally able to enter contracts. This means they're adults, mentally competent, and not under duress.

Legal Purpose: The contract can't be for anything illegal or against public policy.

Step 1: Start with the Basics

Every contract needs to clearly identify who's involved and what's being agreed to. This isn't the place for assumptions or "you know what I mean" language.

Who: Include full legal names and addresses for all parties. If you're dealing with businesses, use the official business name and registration details.

What: Describe exactly what's being provided or done. "Marketing services" is too vague. "Creation of 10 social media posts per week for Facebook and Instagram, including graphics and captions" is specific.

When: Include start dates, deadlines, and any important milestones.

Step 2: Define the Money Matters

Payment terms cause more contract disputes than anything else. Be crystal clear about:

• How much is being paid
• When payment is due
• What happens if payment is late
• What payment methods are accepted
• Whether there are any additional costs or expenses

For example: "Client will pay $2,000 within 15 days of invoice receipt. Late payments incur a 1.5% monthly fee. Payment accepted via bank transfer or check."

Step 3: Set Clear Boundaries

This is where you define what's included and what's not. Think of it as drawing a fence around your responsibilities.

Scope of Work: What exactly are you providing? Be specific about deliverables, timelines, and quality standards.

What's Not Included: Just as important as what you're doing is what you're not doing. This prevents scope creep and additional work requests.

Change Procedures: How will changes to the original agreement be handled? Who can approve changes and how will additional costs be calculated?

Step 4: Plan for Problems

Every contract should address what happens when things go wrong. This isn't pessimistic - it's practical.

Termination Clauses: How can either party end the agreement? What notice is required? What happens to work already completed?

Dispute Resolution: Will you try mediation first? Which state's laws apply? Where would any legal proceedings take place?

Force Majeure: What happens if circumstances beyond anyone's control (like natural disasters or pandemics) prevent fulfillment of the contract?

Step 5: Protect Your Interests

Depending on your business, you might need additional protection clauses:

Intellectual Property: Who owns the work created? Can the client modify it? Can you use it in your portfolio?

Confidentiality: If you'll have access to sensitive information, include a non-disclosure clause.

Liability Limitations: Consider limiting your liability to the amount paid under the contract.

Step 6: Make It Official

For a contract to be enforceable, both parties need to sign it. In today's digital world, electronic signatures are just as valid as handwritten ones.

Dating: Include the date the contract is signed.

Signatures: Both parties must sign. Electronic signatures through platforms like SureThing are legally binding and much more convenient than printing, signing, and scanning.

Witnesses: While not always required, having witnesses can strengthen the contract's validity.

Step 7: Keep Good Records

Once signed, store the contract securely and make sure both parties have copies. Digital storage is fine, but make sure you have backups.

The SureThing Advantage

While you can certainly write contracts from scratch, using a platform like SureThing streamlines the entire process. You get:

• Pre-built templates for common agreement types
• Guidance on essential clauses
• Electronic signature capabilities
• Secure storage and management
• Legal validity without legal fees

When to Get Professional Help

DIY contracts work great for straightforward situations, but some scenarios require professional legal advice:

• High-value transactions (typically over $10,000)
• Complex intellectual property issues
• International agreements
• Highly regulated industries
• When the other party insists on their own complex contract

Common Contract Mistakes to Avoid

Vague Language: "As soon as possible" and "reasonable quality" mean different things to different people.

Missing Signatures: An unsigned contract is just a proposal.

Ignoring Local Laws: Contract requirements vary by state and country.

Forgetting Updates: Contracts should be reviewed and updated regularly.

The Bottom Line

Writing effective contracts is a skill every business owner should develop. Start with simple agreements for straightforward situations, and don't be afraid to get professional help for complex deals.

The goal isn't to create the perfect legal document - it's to create clear understanding between parties and protect everyone involved.

Ready to create your first professional contract? Start with SureThing for simple, legally binding agreements that protect your business without the legal fees.