Law

Methods for Drafting Legal Documents and Agreements

Pay careful attention to the accurate description and explanation of the parties in drafting legal forms and contracts. In addition, the “name(s)” of the parties to the agreement (individuals, legal entities, or “both”) must be specified.

Although this may seem like standard data, providing an accurate and complete description (and statement) of the parties involved from the start is crucial. Think about it: you probably don’t address someone relatively so formally in conversation or, say, a business letter as you would in (formal) writing. This is frequently the case when talking to a close friend or relative. However, it would be best to use still their “complete name” rather than a truncated form when writing the contract. Instead of just saying “Pete Jones,” you may type “Dr. Peter J. Jones” or write “Peter J. Jones.” Having the accurate (and complete) name of the parties is vital in the unlikely event that your contract ever becomes involved in litigation.

Using the correct and complete “names” in a contract is crucial because it establishes a common understanding of the terms and conditions of the agreement between the parties. If you take the time to ensure that ALL information (and relevant details) are accurate, you may rest easy knowing there will be NO confusion regarding the parties’ intentions. This is especially true if essential information has been omitted or altered.

Don’t be shy about using the parties’ (current) addresses to confirm their identities. When signing a contract under the name “Dr. Peter J. Jones,” for instance, it should be, “Dr. Peter J. Jones, with the current residential address of XXXX Whatever Street, Los Vegas, Nevada???.”

When drafting a contract or legal document, it’s vital to use all parties’ correct and complete names.

If you’re doing business with a corporation, it’s essential to make sure you have the correct name by requesting a copy of the organization’s papers. There are millions of legally recognized businesses and corporations in the United States, and “subtle differences” between identical names make it easy to insert the wrong term into a contract accidentally.

It can be tough to win a court lawsuit for something like “breach of agreement” if the other party is represented by an experienced attorney who claims you’ve been dealing with a different corporation from the one his clients represent. On behalf of your client ACE Fencing Supplies, you may have entered into an agreement for a particular business service. ABC Fencing Supplies may be the name you have in mind for your business, while ACE Fencing & Supplies Inc. may be the one that appears on official documents.

A judge may have second thoughts about awarding you damages if, for example, your customer doesn’t pay you, even though the difference seems minor. Unfortunately, a customer who refuses to pay by the terms of your legal contract may also be willing to say:

The supply deal wasn’t with me or my company, so I owe you nothing!

When drafting a contract for business transactions with a local company, it is crucial to include correctly identifying the state in which the company is registered. The full company name and address of the business’s headquarters should be specified in every contract.

If this matter ends up in court, remember that your chances of success increase the more precisely you “identify the parties.”

Remember this one word: “Consideration.” Before signing any binding legal document, you should give it careful consideration. Why? Because there will likely be a provision at the beginning of the contract designating a sum of money, goods, products, services, etc., as “consideration” between the parties. Using “consideration” as an option in a contract has a long and storied history in American law. “Consideration” is used in legal contexts to describe anything of value. For an agreement to be enforceable in law, there must be an exchange of “consideration,” which might be monetary or something else of “Value.” To “give and receive” something of value in a legal contract or date, both parties must exchange something of worth. Either party may transfer “something of value” to the other, provided that the transfer is voluntary and the party making the transfer is not obligated to transmit under any other circumstances. If you’re buying a car from a private party and agree to pay in cash, you’ll need to “hand over” the money to the seller before he or she will “hand over” the vehicle.

This creates “consideration,” or value exchanged for the agreement to be legally binding.

Here’s another example that fits the mold. It’s a waiver of claims that both parties sign. Suppose you accidentally hit a parked automobile and offered the owner $1,550.00 to resolve the matter without going to court. In this situation, you and the owner have agreed that you will “hand over” $1,550.00, and the owner will not file a summons against you. Get the owner to sign a written “release of liability” or “general release form” to show that you and the owner have resolved this issue.

The “consideration” in this situation includes your payment of $1,550.00 and the owner’s waiver of any right to sue you for damages. Even though the owner did not hand over any tangible goods, the agreement is nonetheless supported by “consideration” because the owner gave up a legal right.

The “Term and Termination” provision is a robust clause that should be included in every contract. Contracts often last for set amounts of time, spelled out in the fine print. The term can be spelled out in plain English like this:

There will be a 24-month commitment from the date this agreement is signed.

When the agreement’s duration has ended, what happens next? Even if you believe that the contract has finished, it may be deemed to “renew” itself for an additional term that is typically equal to the original duration under certain conditions and in certain states. This may be the case if the parties “act” after the expiration of the term.

However, this is NOT the case in most commercial and real estate transactions. It may be essential to specify whether or not you intend for the contract to be renewed, for instance, if you want to continue selling a particular product brand. The customer agrees to continue paying (by the terms outlined in the contract, one party may conclude that the signed agreement “has been extended” and renewed by the conditions as agreed to by both parties).

All rights reserved, Frank Sullivan, 2009.

This article may be reprinted in its entirety and without charge in any non-commercial publication, such as a newsletter, magazine, or website, provided the copyright notice, author bio, and contact information provided below are included with each reproduction. Any online article worth its salt will have a bio and link to the author’s site.

Frank Sullivan has practiced contractual law, personal and business protection, and related areas for 27 years. The website where anyone can get free legal documents is under his control.

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