Generic Contracts: Everything You Need to Know
Generic contracts are essentially agreement forms. Two or more parties will need to agree on a number of terms in order to move forward. 4 min read
Generic contracts are essentially agreement forms. Two or more parties will need to agree on a number of terms in order to move forward. Once signed, a contract becomes a legally binding agreement. By taking this step, both parties are protected. When creating a business contract, for instance, one party will provide products or services while the other party will be expected to compensate the other party for what they purchased.
When it comes to conducting business, agreements can change over time. By creating a contract that clearly states the terms and conditions of your agreement, both parties will understand what will be expected of them. These details will include expected timeframes, required payments, and any related procedures involved. This will ensure that everyone is on the same page.
Although this process may seem straightforward, writing a legitimate contract is not easy. In order for a contract to be valid, it needs to include a number of things. Due diligence during this time can protect both parties in the future.
Whether you write a contract, are using a template, or have been given a contract to sign, it is imperative that you read through all of the content first. Before you sign, make sure that all of the stated information is accurate in terms of what you agreed to. All of the names and related details need to be correct and spelled correctly. If there is any unclear language, now is the time to address it. Also, review the fine print and discuss any terms you're not sure of.
Once you have signed a contract, it becomes a legally binding document. This means that you may be stuck in the outlined terms or in some cases, you may face a possible breach of contract. Some contracts have an indemnity clause, so be mindful of how you assign any responsibility for errors.
Essential Elements of a Contract
When creating a contract, this document will need to include the following four things:
- There needs to be an "offer."
- As well as something in exchange for that offer, also known as the "consideration."
- Both parties will need to accept the terms of the contract itself, also known as "the acceptance."
- Both parties must agree to the outlined conditions and understand that they are entering a legal contract, known as "mutuality."
Research Local Regulations
If you are following a template, it is recommended that you follow all associated local regulations which may apply to your unique situation. For example, you may need to address industry or union-related requirements. Ask yourself, do any insurances or restrictions apply to your circumstances? Perhaps there are noise restrictions or even planning permissions that you need to consider before you begin.
Define Specific Details
When creating a contract, the most important thing to remember is that things that may be obvious to you will not be obvious to someone else. This is why you need to clearly spell out everything that is related to your specific agreement. Define all key terms and the exact products/services that will be provided. For example, if you state "due in 30 days" without any clarification, you may mean business days and the client may think calendar days. When not clearly defined, you could find yourself arguing over late fees.
When creating your contract, make sure to include:
- All of the relevant information related to both parties
- When the contract starts and when it ends
- Any key terms used throughout the contract
- The products and/or services that will be provided (in detail)
- Payment terms, including any milestones
- Any possible fees for late payments
- Any insurance requirements
- Breach-of-contract process
Signing the Contract
Before you move forward, make sure that all the required blank areas are signed. Also, if there are any blank lines, cross them out to make sure nothing is filled in that you did not personally agree to. In the best case scenario, both parties will sign two original copies of the contract. At the very least, request a copy and make sure that everything is accurate. Place it in a safe place for future reference if need be.
By creating generic contracts, you will enjoy greater peace-of-mind moving forward. Being proactive will help make sure that everything goes smoothly and according to plan. If you have any questions about what you should include based on your specific circumstances, it is best to ask for professional assistance. This is particularly the case when you're signing a business partnership contract or something of similar scope.
If you need help with generic contracts, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.