How To Write A Simple Business Contract

Writing a contract can be tricky, especially if you’re not familiar with contracts in general or business contracts in particular.

That is why it is very important to write your contractual agreement as simply as possible. You do not need to include every little detail about what responsibilities each party has, but you should make sure that everything is clear.

Contracts are an integral part of business, so it makes sense to learn how to create yours. Even if you are only doing simple one-time agreements, this article will help you.

Writing a business contract isn’t too difficult, but it does take some time to master. When you have done that, you will feel more confident when negotiating and signing contracts.

There are many ways to begin writing your own business contracts, and this article will show you two different approaches.

Identify your partner

how to write a simple business contract

The first step in writing a business contract is to identify who you are doing business with. This could be someone you’ve met, or someone that you have contacted via social media or through their website. It may also be another company that you have done business with before!

If it’s the later case then make sure they don’t need this contract as they have one already. You should also check out their reviews so you know what to expect from them.

By having these checks completed beforehand, there won’t be any hard feelings if things go wrong.

Include a clause that addresses confidentiality

how to write a simple business contract

Confidential information you share with them will be protected under law from disclosure to others. This includes things like business strategies, marketing plans, and financial documents.

You can also limit their ability to use this information outside of the company. For example, they may not disclose it to competitors or make changes to these strategies due to personal reasons related to yourself or your company without your permission.

Include a clause that addresses conflict of interest

how to write a simple business contract

Conflicts of interest are always tricky, but in business they can become disastrous for you as a provider or a recipient.
As a service provider, your integrity may be questioned if someone else offers similar services under their own name.

This could create very poor perceptions about you both, which will probably end up hurting you in the long run.

For example, let’s say I offer you a service and you decide to pass it off as your own. You may not tell your clients any kind of hard truth about yourself, your skills or the quality of your product.

By doing this, you risk losing trust from your client, and possibly even hurt business in the future. This would be bad for you because you made a promise to help them, and now you have broken that.

There is also a chance that people might question the quality of your services if you don’t refer to yourself consistently.

Include a clause that addresses return policies

how to write a simple business contract

It is very important to include an early termination fee (ETF) provision in any contract you have where you sell your services as an entrepreneur or business owner.

This will be discussed more in detail later, but this clause comes in when you are terminating the contract before it ends. This usually happens because you do not want to work with a person or company for some reason, so you stop receiving service from them.

A common way to handle this is to give them two days’ notice, and if they don’t pay the ETF, then you go after legal action instead of normal reconciliation processes.

Legal action can easily cost lots of money, especially when dealing with small businesses or individuals, so this option is better than re-entering into contractual obligations.

Include a clause that addresses payment

how to write a simple business contract

It is very important to include an explicit payment provision in your business contract. This will prevent any potential issues from coming up later, when you need to pay or be paid!

It is best to have it as a separate section at the end of the contract. For example, “Payment Terms” or something similar. Make sure this is clear and easy to understand for both parties involved.

Make sure there are no restrictions on how to make payments either – doing it via PayPal is ideal since you can easily transfer money online.

Sign the contract

how to write a simple business contract

Before you start writing, make sure to check your contracts for consistency and make sure everything is yours! Make sure to sign in front of the other party so there are no doubts or suspicions about who wrote it.

Once both parties have signed, then you can begin typing up the contract. Do not get too excited though, this takes time!

Business relationships take work and even more work when one person does not hold their commitments firmly. It is best to be prepared for this and not depend on others’ good behavior.

Provide a copy of the contract to your partner

how to write a simple business contract

It is very important that you provide them a copy of this contract, as well as an opportunity to make changes or add notes.

This goes for both parties having their own copy as well as them being able to review yours.

If they ask to look at it, make sure there isn’t something in it that makes you uncomfortable (like if someone used hurtful language towards you), but beyond that, you can let them have a look.

Make a contract

how to write a simple business contract

Writing a business contract is very different than writing an everyday personal contract. For one, you will probably not use formal legal language or even spell every word correctly.

Business contracts should be read by someone else so there are no hidden clauses that can hurt you later. Therefore, it does not matter if you write in fancy lingo or use slang, as long as people can understand what you want to say.

The other important thing about business contracts is that they must be specific and clear. No one wants to enter into a contract with no detail, but many things we do every day have implicit agreements within them. For example, when you agree to work for money, you agree to put in certain hours and meet deadlines.

Specific timing and budget details are needed in a business agreement to hold up against any accusations of unfairness or lack of faith in each other’s ability to fulfill their end of the bargain.

About The Author

Tiara Ogabang
Tiara Joan Ogabang is a talented content writer and marketing expert, currently working for the innovative company With a passion for writing and a keen eye for detail, Tiara has quickly become an integral part of the team, helping to drive engagement and build brand awareness through her creative and engaging content.
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