Key Terms
STANDARD CONTRACT STRUCTURE (in order)
1. Title 2.
FORMATTING NOTE
Best contracts use clear headings. Bold and underline capture the reader's eye better than italics alone.
GOOD TITLE EXAMPLE
"Employment Agreement Between [Name] and [Company]"
BAD TITLE
"Agreement" - tells you nothing.
Define material terms
Goods, services, quantity, quality, price. Include industry-specific terms.
Covenant
A formal promise to perform.
ACTIVE (clear)
"Buyer will pay Seller ten dollars." PASSIVE (ambiguous): "Seller shall be paid ten dollars." - Who pays? Is Buyer in br
Condition
Something that must occur before performance is due.
EXAMPLE
Property purchase contract where the escrow amount changes between drafting and signing based on accrued interest.
Material breach
A substantial breach of contract that excuses the non- breaching party from further performance AND gives them the right
Best contracts
Anticipate reasons for breach and identify consequences.
Definition
A minor typographical error in a written contract.
Common in
Vehicle loans, installment payment contracts.
ENFORCEABILITY REQUIREMENTS (both must be met)
1. Must apply to ALL parties equally (not just one side).
Best practice
Discuss modification procedures BEFORE signing. Reduces friction later.