Five Ways to Write a Secure and Favorable Contract


What is a Contract?

A contract is an agreement between two or more parties, involving the exchange of something of value, and creating some obligations and corresponding rights on both the parties as against each other. A valid legal contract is enforceable in Court, meaning that if one party refuses to abide by the terms, or defaults on his duty, then the other party can approach the Court to enforce his rights against the defaulting party. But for this, the contract between the parties must be legally valid, and it must be carefully drafted to ensure that the terms and conditions are favourable to you.


  • Include all necessary information, and detail the purpose of the contract, and the clear identity of all the contracting parties.

Eg; If you are entering into a contract to purchase a car, then specify the car’s details (year, model, make, etc.) and the name and addresses of the seller and buyer (yourself), the amount you have agreed on, etc.

  • The specifications and descriptions required to be entered into the contract will vary depending on the nature of the contract: whether it is a contract of employment, a contract of sale, a contract of insurance, etc. the details must be entered accordingly, and must properly describe the subject matter, the terms and conditions, the amount to be paid (specify if the contract is for some other non-monetary consideration), and the mode of payment.
  • Before bringing the contract into writing, ensure that you have discussed the terms and conditions with the other party and are in agreement, and there is clarity on both sides as to the nature and extent of obligations. This will help to prevent later disputes and disagreements, and will help both the parties to do their parts of the contract well.
  • Include clauses regarding the conditions that are to be fulfilled, in the execution of the contract, and warranties in relation to the subject matter. Eg: If you are buying a car from a person, try to negotiate and include a warranty regarding the good working condition of the car. On the other hand, if you are selling your used car, it is favourable for you to not include any personal warranty, and state that it is “sold as is”.
  • Ensure maximum level of clarity and specifications in the language, to explicitly state your intent and the limit of obligations you agree to, and try to leave no room for broad interpretations.




DO (s) AND DON’T (s)

  • Maximum Clarity; no vague statements, conditions, or terms
  • Ensure that the other party is a major, of sound mind, and is legally capable of entering into the contract
  • Include an arbitration clause, if possible
  • Agree on a jurisdiction where claims can be brought in case of disputes
  • Ensure that all parties enter into the contract in good faith, understanding the rights and obligations
  • Avoid mistakes to the best possible level
  • Read the document carefully before signing

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