Avoiding Legal Pitfalls: Learn How to Write a Contract
Media-savvy content creator, with a curiosity for all Salesforce experiences.
Whether drafting a contract for yourself or on behalf of a company, it’s important to know how to do it correctly. When writing a contract, you should include the terms and conditions of the agreement to avoid any legal problems.
For these reasons, join us in the article below to learn how to draft a contract automatically so that everyone listed in the agreement understands their rights and responsibilities.
We also introduce you to Titan, a powerful no-code platform that can give you document generation for contracts and agreements, so you never need to write a contract manually again.
Let’s get started!
Things to Include in a Contract Form
If you need to draw up a contract, a few components are essential to keep your document legally recognized. These elements will provide legal protection to each party in the agreement if a dispute arises. Let’s look at some standard parts that make up a legally binding contract.
An Agreement Between Two Parties
The contract should declare that two or more parties agree to the rights, responsibilities, and obligations laid out in the document. They are designed to legally bind all parties and provide a framework for how the relationship will work. The parties in a contract can be individual people or multiple businesses.
Basic Information
We should not skip basic information when we draw up a contract. These details shared by the different parties help elaborate on the contract’s terms. We suggest always adding a title to the beginning of your contracts so it can be easily identified in a database. You can try out Service Agreement or Sales Contract as titles if you need some examples.
Dates & Signatures
The contract should also contain the date of when the contract was created and other important details like when the contract will go into effect or when a party has to provide a service. You might also want to add a date for when the contract expires. All of these milestones create a timeline for the processes in the contract and clearly guide parties on their responsibilities well.
Your contract will not be valid without signatures. Both physical and electronic signatures can be added to contracts to provide evidence that all parties will comply with the terms and conditions of the agreement. Today, most agreements are digital and need e-signature software for contracts that identify parties and serve as proof they agree to the contents detailed in the document.
Depending on the agreement’s requirements, you might need to consider designing a signature space for witnesses and notarizers.
Rights & Obligations
Whether you create an online contract or a physical one, it should outline each party’s rights and obligations in the agreement. They are the building blocks of the relationship between all parties and ensure the document is legally binding.
The rights in a contract refer to all the entitlements each party receives. For example, in a simple sales contract, a party is responsible for selling goods and has the right to receive payment from the other party when they have completed their obligation.
The contract should also list each party’s obligations in the agreement. These are the acknowledged tasks that the party will perform. For example, in a service agreement contract, the seller can be obligated to visit the buyer’s offices to conduct training. At the same time, the buyer is obligated to pay the prices agreed in the contract for the seller’s services.
Specific Considerations
Since every contract is different, it should also contain terms, conditions, and specific needs relevant to the agreement.
Although automated contracts are quick to build from generic templates, consider the contract’s requirements for the industry in which it will operate.
Here are a few other specific considerations that you could add to a contract:
Acknowledgment of Competence
You should also add a clause in the contract that acknowledges the competencies of a party to perform their obligations. The reason they are often added to contracts is to create clarity for legal implications.
The competencies usually state the skills and expertise levels of the party providing the service. In this way, the contract will note what is expected from the party delivering an obligation. This clause will assist all parties if a dispute arises in the future.
How to Write a Contract Between Two Parties
As we learned, writing a contract agreement can be a lengthy task as important details need to be included in the document. Today, we will explore a guide to creating online contracts, as that is the way of the future, with manual contracts being an outdated document creation method.
Identify the Contractual Parties
As we mentioned earlier, the first step is to give your contract a title. Then, add an introduction that names all the parties involved in the agreement. The introduction should also list all the roles that the parties play and what their responsibilities are.
Next, you need to list the terms and phrases found in the contract and give them definitions. This step is necessary to avoid erroneous interpretations of the contract’s contents.
Define the Contract Duration
Now, you can complete the contract by adding which party is making an offer and who accepts it. Remember to add the rights and responsibilities of each party, as well as custom requirements such as:
Consider Confidentiality Provisions
You must add a clause in your contract that protects sensitive information. This paragraph will ensure that information is not shared with any third party.
Establish Dispute Resolution Mechanisms
It’s also important to share the conditions that need to be met to end the agreement. In this section, you can add a notice period to specify the exact details.
There should also be a passage that explains how to resolve disputes. Mediation and other intervention measures are common processes included in contracts for conflict resolution.
Verify the Legal Compliance of a Contract
You need to declare which country the agreement will be operating in, as the laws of that location will decide the validity of the contract as well as any rulings if there are disputes between the parties.
It’s a good idea to get a lawyer to read the contract and make sure that the terms and conditions comply with the laws under which your business operates.
Contract Administration: Reach Consensus on Conditions
Once you have completed creating the contract, it needs to be reviewed by all parties.
Allow for Contractual Negotiations
Any changes must be updated in the contract and reviewed by all signers. If all parties are happy with the conditions in the agreement, the signing process kicks off to acknowledge the acceptance of the contract.
Outline the Implications of a Breach
When a party does not abide by the terms and conditions stated in the signed agreement, they have breached the contract. There are many consequences of a breached contract.
Here are two common ones:
Titan’s Contract Management Software to Help Draft Agreements
Creating a contract from scratch each time you want to make an agreement can cause many problems. As we know, any type of manual administration task leaves room for data-capturing errors. There is no room for error in legally binding documents, and we understand that you need to protect your rights and obligations.
For this reason, you need contract software. Titan is a powerful platform that integrates directly into your Salesforce database. Our software is not just a contract generator. Titan has enterprise-level apps that create custom documents, forms, and surveys. Our contract management automation tools also assist with adding electronic or digital signatures to your contracts for lightning-fast end-to-end processes.
You can try out our Titan CLM product if you are looking for a dedicated automated contract management solution. This intuitive app lets you redline, edit, and comment on any contract while tracking every step inside Salesforce. Then, use our contract generation tools to quickly build agreements and streamline CLM processes with collaboration rounds.
Our contract generation tool uses no code and is a game changer when collaborating with multiple signers. You get to automatically send contracts to signers who can view, edit, and comment on documents in real-time. Collaboration is fully flexible with Titan’s contract generation software, so you can add participants at any stage of the CLM journey and approve deals faster than ever.
Titan’s no-code Contract Lifecycle Management app has solutions for any use case and we have helped businesses across a range of industries to alleviate the pressure of creating contracts and managing a complicated CLM workflow:
If you work with Salesforce to manage all your agreements, you need contract automation software like Titan to ensure that your clauses, terms, and conditions are accurate and free from any copy-pasting errors.
With Titan, you get to manage, review, and track every change made to your agreement directly in Salesforce. As Titan has a unique bi-directional data flow with Salesforce, you also get a complete 360° view of the contract lifecycle. This means you have complete visibility over every piece of content inserted or deleted in your contract in real-time.
What does a contract look like in Titan?
You might want to update a contract template and replace it with a new one when you are done. Check out the image below to see how easy it is to work in Titan:
Frequently Asked Questions
How do you write a basic contract?
Writing a contract is a lengthy process and needs to include many elements to protect all parties involved in the agreement. We provided a detailed outline in the above article. Please have a look.
What is the format of a contract?
A format can be a digital or physical format. Many businesses have adopted a paperless approach by upgrading contract lifecycle management processes to digital ones.
Contract lifecycle management software like Titan provides automation tools with elements dedicated to all your agreement needs.
We recommend going with digital contracts so you can automatically create, collaborate, sign, and approve your agreements faster than ever.
What is an example of a contract?
Medical service agreements, trading contracts, and non-disclosure agreements are just a few types of contracts. Although there are many types of contracts, their underlying similarity is that they define the terms and conditions between two or more parties in an agreement.
All parties must sign the contract to acknowledge they understand their specific rights and obligations.
What are the 4 steps to making a contract?
There are more than 4 steps to creating a contract. However, if you need the 4 main ones, they would be:
- Offering a Deal: One party would create a contract and send it to the other party to review.
- Acceptance of the Contract: If any of the parties are unhappy with the contract, the agreement enters a counteroffer stage. Once negotiations have been finalized, agreed-upon changes must be added to the contract. The agreement will need to be reviewed again and hopefully accepted by all parties.
- Consideration: This step notes the trade in the agreement. Money, products, services, and even promises are often used in the contract.
- Mutual Assent: This step is entered when parties have signed the contract. The signatures indicate that all parties agree to the terms and conditions stipulated in the agreement.
Personalized CLM Processes with Titan
Thanks for reading our article on creating contracts. These agreements protect businesses across all industries from lawsuits and other penalties. We suggest using Titan to create accurate and custom contracts with data pre-filled directly from Salesforce.
We also help you throughout the contract lifecycle journey for fast moving approval processes. And then, we push documents to Salesforce or any other storage app of your choice. With Titan, you get full flexibility for business workflows.
Contact us for more information.
We hope to see you soon!
Disclaimer: The comparisons listed in this article are based on information provided by the companies online and online reviews from users. If you found a mistake, please contact us.
