Keep it simple.
Contrary to what most lawyers think, you don’t need a lot of “heretofores” and “party of the first part” legalese to make a contract enforceable. Instead, create short, clear sentences with simple, numbered paragraph headings that alert the reader to what’s in the paragraph.
Identify each party correctly.
You’d be surprised how often businesspeople get this wrong and how important it is. You need to include the correct legal names of the parties to the contract so it’s clear who is responsible for performing the obligations under the agreement (and who you have legal rights against if things go wrong). For instance, if a business is organized as an LLP or a corporation, identify it by its correct legal name –including Pvt or LLP suffix — not by the names of the people who are signing the agreement for the business.
Specify payment obligations.
Specify who pays whom, when the payments must be made, and the conditions for making payments. As you might guess, money is often a contentious issue, so this part should be very detailed. If you’re going to pay in instalments or only when work is completed to your satisfaction, say so and list dates, times, and requirements. Consider including the method of payment as well. While some people might be okay with a business check or business charge card, others might want a cashier’s check or even cash.
Agree on circumstances that terminate the contract.
It makes sense to set out the circumstances under which the parties can terminate the contract. For instance, if one party misses too many important deadlines, the other party should have the right to terminate the contract without being on the hook legally for breaching (violating) the agreement.
Pick a state law to govern the contract.
If you and the other party are located in different states, you should choose only one of your state’s laws to apply to the contract to avoid sticky legal wrangling later. In addition, you may want to specify where you will mediate, arbitrate, or bring legal actions under the contract. This will simplify your life if a dispute does crop up.