How to write a contract: A step-by-step guide

Contracts are a useful way for people to use the law to help themselves. They are an important part of business, and knowing how to make one is a very useful skill. Contracts can be both oral (for example when you buy fruit in the market you normally make on oral contract) or written. Written contracts are better than oral because they show the agreement being made more clearly. Contracts help guarantee that when you make an agreement with someone else, it will be performed as planned.

For example, imagine Obinze owns a small business and needs a certain amount of supplies every week. To make sure he always gets the supplies for the same price, he makes a contract with the supplier. Entrepreneurship is a desired profession amongst young people, and knowing how to make a contract can be a major advantage in this field.


Before you make your contract you should be aware of a few things:

  • It is a good idea that all parties involved have a general idea of what the contract will say, in other words, what is being exchanged for what.
  • Contracts must be made consensually so parties cannot be forced into making or signing them. Otherwise the contract won’t be valid, which means the parties won’t be able to enforce the contract, so it has no real effect.
  • All parties must be legally able to participate, which is known as having “capacity” to make a contract. Having capacity normally involves being an adult and having complete mental competence.
  • Contracts cannot be made for illegal goods or services. Contracts exchanging these things will be void, which means they can’t be enforced by a court, so are essentially useless.


There are three basic requirements of all contracts;
1) An offer
2) Acceptance of that offer
3) Consideration- This is something of value that is exchanged for something else of value.

This doesn’t have to be money, it could also be for example services, goods, or a promise of one of these things. Consideration does however have to be adequate meaning it should be a fair exchange.


1) Start your contract with basic information. Write the date at the top of the page, then the names of the companies or people involved. For example; “This contract is between Obinze and Koku.”

2) After this describe clearly the goods, services, promises etc. that are being exchanged using short sentences broken into short numbered paragraphs. Be very specific about what is being exchanged. For example if you are selling goods specify identifying features like colour, size and brand. If you are selling a house give a description of the house and its exact location. If you are exchanging services specify who will perform the services, for whom, where, when, and for how long.

3) Specify how long the contract will last by including a clause (paragraph) on how the contract will be terminated (ended). For example if the contract is for a one-time exchange you could state that the contract will be terminated when the exchange is complete. If the contract is for on-going services, you could state, for example, that either party can terminate the contract by giving 30 days’ notice.

4) Include a paragraph on what will happen if someone doesn’t abide by the contract, for example “if Obinze doesn’t provide 7 days of services the contract is null and void” or “if Obinze doesn’t provide the goods described, the contract is null and void.” “Null and void” means the contract can’t be enforced at court so isn’t effective. A clause like this provides protection because it means that if the other party doesn’t perform their part of the bargain, you don’t have to perform yours.

5) Include a paragraph on how the issue will be handled if someone breaches the contract. For example you could specify the jurisdiction of any court action (the city or state where you would go to court), and note who will pay legal fees or court costs.

6) Provide spaces on the last page for all parties to provide a signature, if they agree to the terms offered, and a date. Once both parties agree that the contract is final, and sign and date it, the contract is legally binding. This means that both parties can enforce the contract in court to make sure the exchange is performed as agreed.

7) Make sure all parties have a copy of the contract to keep.




  1. Mohamed Hassan 4 years ago November 17, 2017

    I appreciate how you analysis contract issues thanks for your tips of advice

  2. Agnetha 4 years ago November 17, 2017


  3. Mubang Rene 4 years ago November 20, 2017

    Wow,am so blessed to go through has really opened my mind,it will really go in to my contracts now with ease because am an Electrical Contractor.


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