How To Write Legal Contracts For Business That Can’t Be Contested

All business owners understand the importance of contracts. They can help protect businesses and business owners themselves from any number of potential harms or liabilities. However, many business owners do not actually know how to create a legal contract on their own. It is not difficult to make legal contracts that can protect your business once you know how to do it. While there are not many free online courses on the topic, you can still find out the standards your document needs to meet in order to be considered a legally-binding contract in the post below.

Legal Purpose

In order for a contract to be legally binding, it must include a legal purpose. That means that it needs to state the purpose of the contractual obligation being made. For example, if you are agreeing to give 50% of your business profits to a new partner in exchange for their acceptance of equal liability and investment in the company, you will need to state that in the contract. The purpose of legal contracts is also commonly referred to as the offer, object or subject. A contract must have a stated purpose that is lawful in order to be considered legally binding.


Contract law also requires a legally-binding agreement to state the names of the involved parties. These parties must also be competent. Legally speaking, that means that both parties involved must be of sound mind and legal age. They also cannot be under the influence of drugs or alcohol. If you are creating legally binding business contracts, be sure to always include information about the parties involved. Also, make sure everyone signs the agreement totally sober and free from any issues with mental cognition to ensure its legality.


Legal contracts require consideration as well. Consideration is the idea that each party gains something. That means that you offer something of value to the other party and they offer something of value to you. In order to write a contract that is legally binding, their must be an even exchange of value. If a contract is signed and agreed to by both parties for an exchange that is not beneficial to both parties, it can be contested in court. If you are making an agreement about buying a commercial embroidery machine, for example, there must be information about the amount of money you will exchange for it. Make sure you keep this in mind when creating legally binding agreements for business purposes.

Mutual Agreement

Before the actual consent is given and the deal is done, the contract must also include the mutual agreement that will be made. This means that both parties have to have reached an agreement as to what the actual deal will be. For example if you are bringing a new employee on board, you must outline the job responsibilities they are taking on and the compensation they will earn for those tasks. This is the mutual agreement that everyone consents to in the final component of the contract.


Consent must also be given in order for a contract to be considered lawful and legally binding. Both parties must agree to the offer on the table. That agreement must be mutual, free and communicated to one another. It is not considered free consent if one party makes the agreement under duress, undue influence, threats of menace or fraud or by mistake. When writing legal contracts, be sure that both parties are 100% ready and able to consent without any outside influence. This will help you ensure that the agreements are legally binding.

If you are a business owner, knowing how to write a legally binding contract is an indispensable skill. The ability to write a contract will benefit your company time and time again. It will also save you money on lawyers services that you would otherwise need to write legal contracts for you. Make sure that any contractual agreements you make include all the contract law requirements detailed above. This way, you can be certain that you have written a legal contract that cannot be contested in court to receive pardons at a later date. Your business will be much better off for it.

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