Entering into any kind of contract is serious business, one that should only be undertaken after careful consideration. While there has to be a level of trust in any relationship, a contract is there to ensure that the trust is upheld. Therefore, entering into a contractual agreement and making a contract is a process that must be undertaken after careful consideration. It is also a process that should never be rushed. Making a detailed agreement that satisfies both parties is one way to avoid future disputes. In thus article, we look at how to make a contract that is legally binding and satisfies both parties.
Part 1 How to Make a Contract Step by Step
There are certain elements that must be present for a document to be defined as a contract. They include the following.
Step 1: Make an Offer
The first step in creating a valid contract is making a valid offer. A valid offer must have clear communication, definite terms and commitment from both parties. For instance, you can make your client an offer to sell them a piece of land at $100,000. You say that you are willing to finance the land if your client will pay you $10,000 a month for 10 months. This offer is clear (definite terms) since you have stipulated the terms and the item being sold.
The offer should also be considered fair by both parties before a contract can be signed and should be in written, oral or some other form understandable to both parties.
Step 2: State the Consideration
The parties should then discuss and agree on the consideration. This is what the parties agree they will not do. The consideration should also be fair and equitable.
Step 3: Negotiate the Offer
Once the offer has been made and the consideration stated, you and your client may negotiate the offer. Your client must accept the offer in order for it to hold any meaning. During this stage, the contract terms may be amended, creating a whole new offer. Your client may renegotiate the contract, saying they want to finance the piece of land at $5000 for 20 months instead. You can then choose to accept or decline the new offer.
Step 4: Put the Contract in Writing and Sign it
Once you've both agreed to the terms, it is important to put everything in writing and sign the contract. Having an oral contract can work sometimes but it is more prone to disputes. Have your client read and agree to the terms and then sign the contract to show they will abide by it.
Part 2 Elements that should be Included when Making a Contract
There are certain elements that should be in a contract if it's going to be legally binding. Some of them include the following.
1. Offer
Every contract must have an offer. It is a promise to act or refrain from acting which is made in exchange for an offer to do the same. With respect to our example above, you promise to provide the piece of land in exchange for payment from your client.
2. Acceptance
The offer must be acceptable to both parties if a contract is going to be binding. Acceptance is made in a manner that is specified by the offer.
3. Consideration
To enter into the agreement, each party must provide the other party with something of value that induces the other party. This exchange of values is known as "Consideration." Each party must be bound to perform the obligations stipulated in the contract.
4. Written Requirement
While not every contract needs to be in writing to be legally binding, there are certain types of contracts that by law, must be in writing to be enforceable. A written contract also affords the parties a sense of security.
Part 3 How to Sign Electronically after Making Contract
For a contract to be legally binding, both parties must agree with the terms. The easiest way to show this agreement is for both parties to sign the written contract. The whole process of signing a contract has been made easier by the emergence of electronic signature services like SignX. SignX is an electronic signature service that can be very useful when signing sensitive documents like contracts.
It allows the originator of the contract to place their signature in the document and send the same document to other parties for signing. The signatures that are placed on the document using SignX are legally binding and enforceable in any court of law. This is important for any contract. The service is also useful in that the whole process of signing a document can be done remotely. After both parties have agreed on the contents of the contract, they need not be in the same room to sign the contract. SignX allows them to sign the contract wherever they are in their own time.
