Are you about to draft a contract? Here are 7 paragraphs you should include


Lola Berbatovci
Person som skriver under ett avtal.
Make sure your agreements are airtight.

Drafting contracts is an important part of everyday life as a business owner and entrepreneur. Regardless of the type of contract, it’s important you secure your business, avoiding potential disputes. Although contracts tend to look different depending on the purpose, there are some paragraphs that are always good to include. We list the 7 most important ones below.

1. Clearly identify the parties

The most important thing in any contract is to correctly identify the parties involved. So make sure you state all names, addresses, telephone numbers and other relevant contact details. It should be clear without risk of being misinterpreted in any way.

2. Describe the purpose of the contract

Clarify the purpose of the agreement in a way that is clear to all parties. List and accurately describe all the services and/or products you will deliver. Also, describe the expectations the parties have of each other and what the conditions are? Be overly clear rather than allowing for different interpretations of the deliveries. This makes the contract the same for everyone and makes the collaboration easier to implement.

3. Terms of payment

Here, it’s important to both state what things cost and what will happen if the payment isn’t fulfilled on time. Specify how much is to be paid, when the payment is to be made and in what way. Also, specify how the customer will be charged in the event of a delay in payment. State the payment charges for delay and what the interest rate is on late payments.

4. Time frames and deadlines

Having clear time frames and deadlines is essential to ensure that all parties are in agreement. This includes dates for both partial and final delivery. Here, you can also specify the timeframes for any feedback and corrections. And if the customer should have a chance have changes made before delivery, you hve to state how many revisions the customer gets within the terms of the contract. By limiting the time for revisions, you can ensure that the collaboration stays effective.

5. Responsibilities and authorities

It’s important to clarify what you need to be able to deliver according to the contract. In many cases, the customer needs to supply certain information in order for the work to be carried out. And in some cases you’ll need authorization from the customer to be able to deliver. By clarifying what the responsibilities and authorities are for each party, you ensure that you’re not held liable if you don’t get what you need to deliver successfully.

6. Confidentiality and intellectual property rights

If the collaboration and the contract mean that you’ll share confidential information, it’s important to include a confidentiality clause. And the contract should also state who owns the intellectual property rights if any. Usually, the customer owns the intellectual property rights for what is created. Sometimes however, the customer may need to purchase the rights meaning you need to state how this is done, what exactly the customer is buying and how much it costs.

7. You should never draft a contract without a force majeure clause

The force majeure clause usually appears in all contracts that are drawn up. It exempts you from liability if anything happens that is beyond your and the customer’s control. This applies, for example, to natural disasters, war and similar events that make it impossible to perform according to the contract.

Depending on the type of contract you’re writing, there may be other important paragraphs to include. So make sure to review the contract carefully so that you address and clarify all relevant issues before signing. It can be helpful to hire a lawyer to help you draft the contract. That ensures that you don’t end up in an unnecessary dispute that costs both money and a lot of time.

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