How to write an effective contract for your business

Almost all transactions carried out in a company involve some type of contract, be it implicit or written. For example, every time you buy an item, the implied contract is that you are giving money in exchange for the item and its effectiveness. Other times, the contract may be written in the sense that you are giving money in exchange for a service for a certain period of time.

Whenever a contract is breached, the two parties are involved in a dispute and there may be litigation to dispute the meaning of certain terms and provisions of the contract. The purpose of this article is to illustrate how you, the business owner, can write an effective contract that will seek to avoid such ambiguities and ensure that you and the client come to a solid understanding of the terms and conditions.

# 1: make sure you take into account all possible situations in the contract

Whenever the parties enter into a dispute over the terms of the contract, one of the parties may argue ignorance or may argue that the situation was never written into a contract. For example, if you sell SEO services and your client wants to change plans between the duration of their contract, it would be advisable to include in the contract whether this is allowed or not. Another good example is if you are designing a website for your client and your client wants you to make substantial changes even after the website has been launched and finalized. Addressing this in the contract would help avoid a lot of disputes and pain in the long run.

Taking all possible situations into account requires that you really sit down and evaluate the different situations. This is a process that should take a long time. Think, from the customer’s point of view, if he or she saw the contract, what various loopholes and situations would they try to exploit? Chances are, if the client has found a loophole based on the contract you wrote, they will try to exploit it. Make sure to keep this in mind in the contract.

# 2: Write the contract in clear and concise terms that the client will understand

As with everything you write, you need to make sure you write according to your audience. In this case, your audience is your customers. Make sure to use clear and simple language that the customer understands, use simple words when possible, and be sure to define certain terms in the contract if they need to be defined. Also, be sure to use as few words as possible, as long layouts can cause ambiguity problems and the customer may be inclined to omit them.