Hello there! So, you’d like to write a contract? That’s GREAT! I’ve been writing contracts since 2012 as a business lawyer, and contract drafting is a lot of fun (for me, at least). I should say, though, that contract language is what I’d call “legalese;” it’s really a different language. There are a lot of things that people say in normal language that have special (different) meanings in the world of contracts, so if the contract is worth more than about a thousand dollars, you really need to get a business lawyer to help write it, just to make sure you’re not risking it That all said, let’s dive in!
Rule 1 of contract drafting is to keep it simple and avoid the temptation to “sound official.” Like we mentioned above, lots of legal writing has a specific meaning that you probably don’t know about, and adding flagrant “formal sounding” words like “the vested seller hereby warrants in re…” or whatever ChatGPT comes up with, actually creates complexity and makes your contract far worse! (As an attorney, I thrive on complexity–it gives me more arguments for loopholes that the people definitely didn’t want in there!)
Since you’re not an attorney, just write out all the terms you’re agreeing to in your own words. Don’t try and make it look or sound fancier than it is, just write the deal down. Even if the words are not “legal or formal sounding,” we lawyers can flesh out what you meant by those words because you had used those words before, and that was the common definition of them.
Rule 2 is to be as specific as possible! There are an infinite number of weird situations where people will try and look for loopholes in a contract. The more contingencies you write about, the fewer loopholes there are. If it’s a business partnership, write what you would like to have happen if the other partner passes away, or doesn’t want to work at the business anymore, or has to leave the state to take care of a sick relative. If it’s a sale of a product, think about what should happen if the product breaks down, or someone breaks it, or it breaks in shipping. What all are you promising, and what are you not promising? The more specific, the better! If there’s a payment plan, what happens if they miss a payment by 3 days, or 30 days, for that matter? Is there collateral? Could you take it back somehow if they didn’t pay for it? Just think about it–because life happens!
Rule 3 is to write why you are doing this contract. It probably seems really obvious to you at the time, but I’ve spent years in court trying to argue why people entered into contracts in the first place! You can avoid all of those legal fees by stating very clearly, at the top of the agreement, that we want to enter into this contract so that Bob the builder gets paid and Jack gets his box, or whatever it is you’re contracting for. To enforce a contract if, God forbid, someone’s in breach of the contract later on, the judge will have to know very clearly why the contract was written in the first place! When a contract is breached, the remedy is to “make the other side whole, as if the breach never happened,” but that’s difficult to determine if you don’t know why the contract was made in the first place!
Rule 4 is to specify when the contract ENDS. This is monumentally important, but very often neglected. Write down when the contract ends, and if it’s an ongoing thing, like a subscription agreement, put a term on it (like 90 days or a year) and then have it automatically renew unless either person wants to stop it (in which case they’d have to give Notice that it’s going to end) so that everyone can prepare for the end of the deal. If it’s left open-ended, one could argue that you’re on the hook for this contract for the rest of your life!
Rule 5 is to have a professional draft the contract if it’s anything over a thousand dollars or so. Why? Because the risk is so high. I’ve seen people write contracts for $440,000 dollars worth of goods, and then the first chance the other side got to use a loophole, they did, and the other side was out around $300,000. There was little that we could do to help because the contract was just badly written, and the loophole was, well, an enormous gap in the agreement. Don’t be “that guy!” Lawyers are cheap as hell when you compare our rates to draft an agreement to the money you lose when the other side uses a loophole!
