A contract is an agreement between two or more people or groups to do (or refrain from doing) something in exchange for something of value. It can be verbal, but it is usually safer and easier to enforce if it is in writing. Most people use lawyers for contracts but you don’t have to, you can do it yourself provided you meet a few requirements. For uncomplicated occasions you might consider writing up your own contract.
Competency, Consideration and Mutual Assent
The three pillars upholding a contract are essential as they determine its validity:
- Competency in a legal sense means the capacity of both parties to enter into a legal agreement (usually no minors or persons of diminished mental faculties).
- Consideration means the exchange of something for another thing , that is, each side must ‘give’ in some way, and
- Mutual Assent means that each side must clearly understand the terms of the agreement.
First, title the document “CONTRACT” and include all full legal names with middle initials, and the date. State the agreement itself. Consider all possible outcomes, and address them, e.g., “In the event that the rented property sustains damage, Tenant’s deposit will be used for “Materials”. It is best to be as specific as possible as to the conditions of the agreement, so as to avoid confusion. Use common words, with common meanings. Give definitions as you go, and use them consistently, e.g. “Materials,” meaning “all supplies necessary to restore prior condition”.
Just in case: Include a clause stating that in case of litigation, the prevailing party has the right to recover attorneys’ fees from the other party.
Always explain terms that would not be understood by laymen. Write multiple drafts before the actual contract. A contract should be typed, with both parties initialing each page and signing in blue ink (so that it is easily identifiable from copies.) Print the contract on heavy, high quality paper. Unless required by law in a particular state, it does not have to be notarized.