General Contract: Everything You Need to Know
A general contract is a written agreement that can help keep your business endeavors from becoming a headache.3 min read
A general contract is a written agreement that can help keep your business endeavors from becoming a headache.
A contract for services is an option when someone else or you provide the services. A general contract for services sets out the terms and conditions for the services that are to be provided.
You can write a general contract for services if:
- Your business is going to provide a service for someone else, a person, or a business.
- You are hiring a business to provide services for you.
The general contract for services, also known as a service contract, establishes the relationship between the two parties, one who will be receiving a service and the other providing the service. The contract helps to define the price, duration of services, and obligations, so if there's disagreement in one party, the other is protected.
Do's and Don'ts of a General Contract
- Before writing an agreement, you have to think about the end goals for a contract. A good contract captures the party's intentions, and it's important to clarify the contract conditions before writing them down.
- Each party should have enough time to look over the contract and sign it to reduce the possibility of one party not understanding the terms.
- A signed contract is important before any services are done, money is transferred, and goods are exchanged.
- Two copies of the agreement, one for each party, have to be signed.
- Important documents, such as the contract, should be kept on file and organized.
- Some agreements are better off being notarized or witnessed to limit challenges to a signature's validity.
- Both parties in a general contract should review it so that the relevant points are included. There's no room for assumptions, and it's better to have everything in writing.
- If the agreement is complex, make sure to use the services of an attorney to help draft a contract.
General Agreement Instructions
These provision to provision instructions will help make it easier to understand the contract terms:
Numbers and letters Section 1(a) and Section 2(b), etc., correspond to provisions in the contract.
The introduction of parties mentions the parties and the agreement date, where each party is given a name, like Party 1, to be used throughout the document.
- Section 1 corresponds to party 1's obligations. The obligation can be anything from performing a service, paying money, or transferring property. The blank space in the document should describe these obligations with specific and clear language.
- Section 2 corresponds to party 2's obligations with the same rules as above for party 1.
- Section 3 is for representations and party warranties. This optional section is for any additional promises or understandings by the parties. If you don't have this section, just rearrange the provision numbers.
- Section 4 is for additional terms that has not been listed and is also an optional provision.
- Section 5 is an optional provision for arbitration since the costs of going to court are rising. If there's a dispute, both parties will participate in binding arbitration and not litigation, where a neutral third party decides. Each state has its own arbitration rules.
- Section 6 is for general provisions which have subsections with well-known contract language.
- Section 6 (A) is for the addresses where the legal correspondence will be delivered.
- Section 6 (B) states that both parties will not transfer obligations without prior written consent by the other party.
- Section 6 (C) explains that neither party will dismiss any part of the agreement and that changes will be in writing and signed by both parties.
- Section 6 (D) is for if previous agreements surface, the signed agreement will take over. This provision can provide some protection when past agreements are mentioned in an argument.
- Section 6 (E) protects the agreement completely, even if one part is later deemed invalid by state law, for example.
- Section 6 (F) is a governing law provision that allows the parties to choose which state law will enforce their agreement.
- Section 6 (G) The parties have had the time to look over their agreement and look for a legal representation.
- Section 6 (H) Even if the party's locations differ or there's an electronic signature, all of these will be considered as part of the same agreement.
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