Contracts are made every day.
In fact, you make them every day, whether you realize it or not. Signing a receipt for your lunch? That’s a contract. Grabbing a ticket when you enter the garage? That’s also a contract.
Clearly you can make a contract yourself. You just need a few essential ingredients such as an offer (“I’ll make you a salad for $10”), an acceptance (“Sounds good to me”), an exchange of value (“Here’s $10 for your salad.”) and both sides intended to enter into this contract (e.g., “I’m not being forced to buy or sell this salad!”).
You can have both written and oral contracts. When it comes to your business, it’s likely that you’ll want most of your contracts in writing. So here’s the question:
Can you write your own contracts?
The simple answer is YES. You can write your own contracts. There is no requirement that they must be written by a lawyer. There is no requirement that they have to be a certain form or font. In fact, contracts can be written on the back of a napkin!
So, the better question to ask is:
Can you write a good contract on your own?
The simple answer again is YES. To be clear, if you had all the resources in the world, it would be easier to hire a lawyer to write one for you. But if you are like the majority of entrepreneurs who are starting a business or doing freelance work, hiring a lawyer is either going to be too expensive or too much of a hassle. So you’re left to write the contract yourself.
In order to write a “good” contract, it might be helpful to define what a “good” contract is. Assuming that the contract has all the essential ingredients (see above), a “good” contract is:
1. A contract you can understand completely.
It would be a terrible business decision to sign a contract in a foreign language that you can’t understand. The same goes for a contract that is in legalese where you have no idea what it’s saying.
There is no requirement that a contract be written in complete legalese. (That’s right. Read it again. If you don’t believe me, ask any lawyer.)
When you sign a contract, you’re creating promises that can have real world consequences – good or bad. If you sign something that you don’t understand, it’s as if you’re signing something with your eyes closed. Again, if you can afford a lawyer to translate the contract for you, that’s great. But a majority of us don’t have that luxury, so you need to make sure that YOU understand the contract completely.
Also, a contract is best used as a communication tool. So if either side cannot understand what the contract says, you’re planting a seed for miscommunication and all the potential ugly things that come with that. You want the contract to lay a foundation of transparency and trust. So make sure it is in a language you understand.
2. A contract that lays out your needs and expectations in this relationship.
You’re hiring a contractor and you expect frequent updates and the ability to provide feedback? Make sure it’s in your contract!
You’re being hired and you expect the client to pay for expenses such as gas and food? Make sure it’s in your contract!
This goes back to a contract being the best communication tool that you can have for your business. You can use the process of writing a contract to help you figure out what needs to be further discussed and agreed upon.
3. A contract that includes all the terms that you’ve agreed on.
Most contracts don’t need to be in writing. So why bother? Well, memories can be short, especially if and when a heated situation arises and emotions get involved. With a written record, there is less chance of a “faulty memory” coming into the discussion. Also, it’s immediate proof if you ever get into a dispute over the contract.
4. A contract that protects you and your business.
Think about the relationship you’re about to enter. What are the potential risks? For example, if you’re hiring someone to create something for you, is there any risk that there might be confusion on who owns the “thing” once it has been created? Make sure these risks are covered in your contract.
It’s impossible to predict everything and anything that can go wrong, but it’s still worth covering your bases on situations that you know are common in your business and industry. If you’re thinking, “I have no idea what is common in my business or industry,” the best source is to ask your fellow entrepreneurs and freelancers. Find forums where you can ask and crowdsource that information. Afterwards, make sure you include it in your contract!
In conclusion, can you write your own contract? Yes, you can. And the things that make a “good” contract don’t require you to write them in legalese or hire a lawyer. In the next few posts, we’ll cover how to get started and other helpful tips. Stay tuned!
Disclaimer: This article is for informational and educational purposes only, it is not legal advice. It does not create an attorney-client relationship between you and Lawgood, its founders, or the author. If you need legal advice, you should hire a lawyer.
