Contract Terms Checklist
As you may know, a legally binding contract requires several necessary elements: offer, acceptance, parties who have the legal capacity to contract (minors under 18 years old and people who are mentally incompetent do not have the legal capacity to enter into contracts), lawful subject matter, mutuality of agreement, valueable consideration, mutuality of obligation, and, in many cases, a writing. Here we will focus on what provisions are necessary when forming a written contract.
Although all contracts are different, there are certain contract terms that are commonly included in business contracts. Not all of these provisions will be included in every contract, and most contracts will include additional provisions that relate specifically to their particular subject matter.
Common Types of Business Contracts
There are several common types of business contracts that people enter into every day. These include sales-related contracts like a bill of sale or warranty. There are also employment contracts such as consulting agreements and non-compete clauses. There are also leases, joint venture agreements and more.
The following checklist serves as a general guide to what provisions may be important to include, or at least consider, in the business contracts that you enter into.
Please note that the following checklist is provided for informational purposes only and is intended to be used as a guide prior to consultation with an attorney familiar with your specific legal situation. This checklist should not be considered a substitute for the advice of an attorney. If you require legal advice, you should seek the services of an attorney.
Contract Terms Checklist
Identity of the parties
- Individuals or business entities?
- If businesses, what type? (partnership, corporation, etc.)
- Name of person signing on behalf of the business
- Signer's official title
- Does he or she have authority to bind the business?
Addresses of the parties
Purpose(s) of the contract
- In general
- Duties of each party
- Rights of each party
- Relevant dates
- Relevant prices or other dollar amounts
- Relevant quantities
- Payment terms
- Lump sum, COD, installments?
- Payment due dates
- Late fees
Limitations on liability
Venue of lawsuits involving the contract
Statement that contract constitutes entire agreement
Severability of individual provisions
Signatures of authorized signatories
Have an Attorney Help You with a Contract
While it's important that you understand the terms and conditions included in any contract you draft or sign onto, sometimes it takes the expertise of a legal professional to interpret contractual language into plain English. A misused or misspelled word, for example, has the potential to entirely change the meaning of a contract. If you are unsure about what you're signing or need help drafting a contract for your business, consult with a business and commercial law attorney near you.
Check FindLaw's Contract Law and Drafting Contracts Sections for Additional Articles and Resources