As electronic contracts and agreements are legally binding and enforceable, and advanced digital signatures have made the whole process of documentation secure, protected, and confidential, so the chances of fraudulent activities and malfunctioning have been minimized. Therefore, every business now needs to have a contract template PDF, so they can use if for creating different contracts as per their need and initiate an online signing procedure.
In the following post, we will help you draft a contract template to prepare legally binding contracts:
Have a look at the different steps!
Identification of concerned parties
You need to include all those parties that will be involved in the agreement. For that, you need to add all the names of the parties or their representatives. You must ensure that you have written the right names with correct spellings. It is also necessary to include the designations of all the representatives.
The contract templates have all these options, and you only need to fill the fields to update the contract as per your business requirement. If you have properly filled all the information and completed the online signing process as per the system requirement and software regulations related to electronic signature, you will not have any issue in completing this step.
A must-have requirement, in this case, is to add registered company addresses and contact details of all the signees.
Every business contract is based on some services that the involved parties perform at their end. You need to include all the services that will be provided by all the parties to each other. It is a must to include all the services explicitly to achieve maximum clarity and minimize ambiguities if any.
Moreover, every service should be included in the contract, whether large or small. If you have done it, it will be easier in the future to fix the person who has been irresponsible in completing the tasks that have been described in the document.
Also, you need to add all the conditions, complexities that a party may save, and loopholes that may be found during the process. You can also include some additional requirements at the later stages but before the signing process.
The amendments can also be made after the signing process, but with advanced electronic signatures, this task becomes difficult to handle. In this case, the best practice is to create a new contract.
A must-have requirement under this section is to make a list of services that will be a part of the contract.
Incorporation of payment schedule with appropriate rates
For a business contract, pricing needs to be adjusted in any case. For that, you can make it a part of the contract or develop a reference document with the approval of all the concerned parties. The contract must have all the information about rates for all services, whether these are hourly, weekly, monthly, quarterly, half-yearly, or yearly. In some cases, the payments are based on the completion of services.
For example, the first payment will be advanced, the second will be delivered after 50% completion of the project, and last after 100% completion.
The contract should also have information about payment methods. It means that parties will confirm through a contract, whether they will pay through cash, check, online transaction, credit card, or PayPal, etc.
Moreover, you will also clarify how expenses and fees will be paid during the contract period, so there will be no ambiguity about the payments and expenses in the minds of all the parties.
Furthermore, you can also define penalties, fines, or late payment surcharges in the contract to further improve the business contract among all parties.
It is important to mention that most-advanced contract templates provide this section comprehensively, and you only need to know how you will complete all the fields, given in the template.
Terms and Conditions related to the contract
All the basic terms and conditions should be mentioned clearly to make sure that all the parties will understand everything. For example, you need to mention the project start and end date in the contract, so if someone violates these dates, he becomes responsible for it.
The termination rules should also be defined in the contract, so if a company tries to terminate, they must know the circumstances. In most cases, a contract has an ending date, but with mutual consent, the parties can terminate the contract.
However, you will define specific rules to accomplish this task. You also need to include a contingency plan that will be provoked when there will be any dispute regarding the agreed services to help all the parties go into courts for settling the matters.
Customization in the template to suit the transaction
As the requirements of every contract are different, you can also customize the contract templates according to your requirement. However, contract templates are impartial that make sure to avoid any conflict.
However, customization is a necessary part, and to include some additional services, terms, and conditions, information-related fields, customization, and personalization of the contract has a major role.
To define all the rights and duties in a far clear way, you need to understand what should be included in the contract. In this way, you will get success in completing the signing process comprehensively.
Need to understand why service contracts are different from service agreement
All the concerned parties must know the difference between these two. It will help them understand, which document they need for signing it.
Well, service contracts are more rigorous when we compare them with service agreements. The parties must need to exchange promises while preparing a service contract.
Service contracts are legally binding for all the parties, and if someone out of the parties goes into the courts, the judges have all rights to implement all the obligations related to services, and every party needs to accomplish every task that has been defined in the document.
Convert the contract template into PDF
Once, the whole procedure is completed, you need to convert the document in PDF. It is the best practice to minimize the tempering activity. Most contract template providers have this option, and you do not need to learn how you can convert any electronic document into PDF.
If you do not have this option in the software, the conversion process is very simple, and you can learn it in two minutes.
What should we do and not do?
To make a comprehensive contract, it is necessary to consider many components. It becomes more important if you want to make it legally binding for all the parties.
Sometimes, you need a simple contract, but you may also go for complex contracts in which higher stakes are involved. For keeping all these components in mind, we will discuss some Dos and don’ts in the following lines:
Here are some dos, you need to consider:
Use only simple headings that are easy to understand. Simple headings are easy to remember for the parties. In this way, they can reach specific clauses only by searching for a specific heading.
A party can also make references related to a specific heading if it has easy words.
Paragraph Numbering is good
Also, use numbers while using paragraphs. This habit makes the lives of the concerned parties easier. The reason is that numbered paragraphs make consultation easier about specific services or conditions. These paragraphs become the clauses that mean you can use these paragraphs with numbers as a reference ad future consultation.
If you will not do so, it will become difficult to reach a specific point because in this case, you will go through the whole document or section, which can have several paragraphs.
Keep labor and contract laws in mind
We observe many times that contracts have many clauses that can conflict with state laws related to labor and contract. Parties must remember that state laws can set aside the clauses defined in a contract.
Overall, to adhere to a service contract and labor laws, it is necessary to follow all the rules that are defined in these particular acts. If you will not follow it, any of the parties or your employees can go to the courts and charge you if you are ignoring state rules or have ignorance about the law.
According to law, the state has all right to make all those contracts null and void if there are clauses in the contracts, which are violating the state laws. It means that the courts will consider that there was no contract between the parties right from the date when parties signed it.
Use conjunctions with great care
Yes, incorrect use of conjunctions can irritate you during the implementation. Many people do not know how a sentence can dramatically change its meanings if you did not use conjunctions correctly.
Sometimes, you use a conjunction to deliver a specific message. When someone reads it carefully, the meanings can be changed. So, be careful!
Let us discuss some don’ts now!
Punctuations are a must!
Proper use of punctuations makes the contract, easy to understand. And, if you do not know how to use, the meanings will be changed, and you will face the circumstances. Normally, making a contract is a difficult task, and you need technical writers for accomplishing this task; otherwise,
misinterpretation jumps and can confuse everyone around. Therefore, avoiding grammatical mistakes and long statements is key in making a contract.
Do not leave confused words in the document to allow others to interpret as per their requirement
Use clear wording and correct statements in the contract. If you will not do so, any of the parties can consider the words as per his need. Convey your message in straight and simple words. Make sure that no word should be in the document, which has multiple meanings.
Do not use long sentences
Long sentences may create confusion in the minds of the readers. Therefore, use small chunks to provide information to the readers. Small sentences are easy to digest and provide clear meanings to the reader.
Do not allow to modify the content
Make the contract once, and when are agree on it, start the signing process. If someone wants amendments, make sure that you will complete the task before the signing process. After signatures, do not allow anyone to amend the document.
Advanced electronic signature solution providers do not allow to perform this activity without getting the consent from all parties. If you are not using it, make sure to design a new contract in the case of amending the contract.