July 1

How to Write a Business Contract In 5 Easy Steps


A good contract is essential to every business transaction, whether you sell goods or services. It’s a formal, legally binding way to ensure everyone knows their responsibilities and when. But it can be surprisingly easy to draft your contract poorly for something important.


The best contracts are specific enough that all parties know what they’re getting into but not so complicated and full of jargon that people don’t want to read them. You can also check Sample contract agreement from Filepino to help you with your needs.  Read more to learn how to write a business contract.

Identify the parties involved.

One of the first things you should do when writing a business contract is to identify the parties involved. This can be done in several ways:

  • Identify the roles each party will take on within the contract. For instance, one party might be in charge of supplying the goods or services, while another might be in charge of making the payment for those goods and services.
  • Ensure your role is clearly defined, so all parties know what they expect.
  • List all names and contact information for each party involved in the business contract.
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Establish your business relationship.

Establish the relationship between the parties. You’re writing a contract, so you must establish a relationship between two parties. But it’s worth a minute to ensure that your contract is clear about who’s involved and their responsibilities.

Here are some examples of business relationships:

  • A supplier and a buyer where one party sells goods or services to another party for a fee
  • The same supplier-buyer scenario, but this time with multiple buyers purchasing from the same supplier through an agent or broker who acts on behalf of all of them (think of real estate agents, for example).

Explain the terms of the contract.

The contract should include the following:

  • What is the offering, and why you’re offering it? This is what you have to do, or provide, in exchange for money or other consideration. For example: “I will design and build a website for your new business.”
  • What the other party is offering, and why they’re offering it? This is what they have to do, or provide, in exchange for your product or service.
  • The terms of payment (when and how much). Pay attention to deadlines so that both parties know when payments are due and can make arrangements for any possible delays. You may also specify whether late fees will be incurred if payments aren’t made on time; this will help avoid conflict down in line.
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Include a termination clause.

Once you’ve established the terms of the agreement, it’s time to think about how and when it can end. A termination clause is essential to any contract, as it sets out how and when either party can walk away from their obligations.

A termination clause should include at least two core components:

  • A termination date that covers all parties involved in the contract (if appropriate)
  • A reason for terminating the contract

Address the regulations and get them signed and dated.

Once you’ve covered the basics, it’s time to address the regulations. Ensure that your contract complies with any local or state laws that apply to your situation. The best way to ensure everything works out is by knowing which regulations apply and providing details on how they can be addressed within your particular contract.

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Get signatures from all involved parties. Make sure each party signs their name under their respective signature line at least once so there’s no confusion later on when someone wants proof that they signed something else with the same name already written down for them at some other time during this process.

Lastly comes date stamping and registration with various government agencies.


Writing a business contract isn’t scary once you know how to do it. Make sure that it is simple, clear, and precise. If you need help, you can consult with a business consultant or a lawyer.

Author’s Bio:

Angelo Castelda works as a contributor for a news magazine in Asia. He loves to learn and understand diverse cultures and aims to share through his writing his experiences around the world.

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