A contract typically consists of the fairly standard parts. Each part may be different depending on what the contract is for, but most of the time these standard terms are there.
- The Title – This is what you call the agreement (obviously).
- The Parties – Identifies the individuals or entities subject to the contract.
- The Recitals/Background – This explains why the parties are entering into the contract. They can be more important than you think.
- The Consideration – Each party needs to have some sort of “legal detriment” or obligation when entering into a contract for a contract to even exist.
- The Terms – The terms explain what each party is going to do, and perhaps how they will do it and for how long. This is more or less the reason for the contract.
- The “Boilerplate” – These are extra terms that make a big difference in the contract but people like to ignore.
- The Signatures – Executing the contract makes it formal and official.
Most of the contracts you enter will have these parts. Sometimes they will be longer, in different order, or maybe even shorter. I will be going over these in greater detail in subsequent posts. If you’d like to stay current on our updates, please subscribe to our newsletter!