Key Terms
FORMATTING NOTE
Bold and underlining capture the reader's eye better than italics alone.
CORRECT
"Employment Agreement Between [Name] and [Entity]"
WHAT TO DEFINE
Material terms of the transaction. Goods, services, quantity, quality, price, and industry-specific terms.
Covenant
A formal promise to perform.
ACTIVE (correct)
"Buyer will pay Seller ten dollars." PASSIVE (problematic): "Seller shall be paid ten dollars."
Condition
Something that must occur before performance is due.
EXAMPLE
Not "renovate the kitchen" but specific details about cabinet designs, countertops, materials, and labor.
Material breach
A substantial breach that excuses the aggrieved party from further performance and entitles them to sue for damages.
REPRESENTATIONS
Statements of fact made to induce someone to enter a contract.
WARRANTIES
Express promises that guarantee something in furtherance of the contract.
Format
Business entity name, then signature line, then signer's name and title beneath.
By
__________ Khalid Ahmad, President
CRITICAL RULE
Drafting mistakes go against the party who wrote the contract. The non-drafting party gets the benefit of the doubt.
Vagueness
Imprecise, uncertain, or unclear contract language; may indicate no meeting of the minds.
WHY IT MATTERS
Vagueness can mean the parties never had a meeting of the minds because they were not talking about the same thing.