To write a contract, name the parties, state what each will do and what each will receive, set the deadlines and dollar amounts in specific terms, address what happens if something goes wrong, and have everyone sign and date it. The sections below walk through how to write a contract piece by piece, with example language you can adapt to your deal. Most agreements, whether you’re hiring a freelancer, selling equipment, or bringing on a business partner, follow the same architecture.
Start With the Five Elements a Court Looks For
Before you draft a single clause, the agreement itself needs the foundation that makes it enforceable. A contract missing any of these can be challenged.1Legal Information Institute. Contract
Offer and acceptance. One party proposes definite terms and the other agrees to those terms without changing them. If the responding party alters anything, that’s a counteroffer, which kills the original and starts a new negotiation.1Legal Information Institute. Contract
Consideration. Each party has to give up something of value: money, services, goods, or a promise not to do something. A one-sided promise with nothing flowing back is a gift, not a contract. Courts generally don’t evaluate whether the exchange was fair; they look only for the exchange itself.2Legal Information Institute. Consideration
Capacity. Everyone signing has to be of legal age and mentally able to understand the agreement. Contracts signed by minors or by someone who lacked the cognitive ability to grasp the terms can be voided.1Legal Information Institute. Contract
Legality. The purpose has to be lawful. No court will enforce an agreement to do something illegal, no matter how well-drafted.1Legal Information Institute. Contract
Genuine consent. Even when the other four elements exist, agreement obtained through threats, pressure from someone in a position of trust, or lies about material facts can make the contract voidable.
When a Contract Has to Be in Writing
Oral agreements are generally enforceable, but proving what two people shook hands on is a separate problem. Courts recognize verbal contracts; the practical difficulty of establishing the exact terms is why written agreements are far more reliable.3Legal Information Institute. Oral Contract
Some agreements have to be in writing or a court will refuse to enforce them, a doctrine called the statute of frauds. The two most common categories are contracts involving the sale or transfer of real estate and contracts that cannot be fully performed within one year.4Legal Information Institute. Statute of Frauds Under the Uniform Commercial Code, contracts for the sale of goods priced at $500 or more also need a writing.5Legal Information Institute. UCC 2-201 Formal Requirements Statute of Frauds Other categories that typically require a writing include promises to pay someone else’s debt and agreements made in consideration of marriage, though specifics vary by jurisdiction.
Even when the law doesn’t require writing, write it anyway. A five-page agreement costs far less than the litigation that follows a handshake deal gone wrong.
The Sections to Include, With Example Language
Most written contracts follow a predictable structure. Not every deal needs every section. A simple services agreement doesn’t need a force majeure clause; a year-long consulting engagement probably does. Match the complexity of the document to the complexity of the deal.
Party Identification and Recitals
Name everyone involved using full legal names. For businesses, state the entity type and state of formation. Addresses help if you need to serve legal notices later. A short “recitals” or “background” section then explains why the contract exists.
Example: This Agreement is entered into as of January 15, 2026, by and between Greenfield Design LLC, an Oregon limited liability company (“Designer”), and Maple Street Bakery Inc., a Washington corporation (“Client”). Designer operates a graphic design studio. Client wishes to engage Designer to create branding materials for Client’s new product line. The parties agree as follows:
Definitions
If you use the same technical term repeatedly, define it once and use the defined term throughout. Common definitions include “Services,” “Deliverables,” “Confidential Information,” and “Term.” Put the definitions section near the top so readers see them before the terms appear in use.
Scope of Work and Payment Terms
This is where most contract disputes start, and where vagueness does the most damage. Spell out deliverables, deadlines, milestones, and how payment works.
Example — Scope: Designer will create a logo, brand style guide, and packaging design for Client’s “Harvest Gold” product line. Designer will deliver initial concepts within 21 calendar days of executing this Agreement. Client is entitled to two rounds of revisions on each deliverable. Additional revisions will be billed at $150 per hour.
Example — Payment: Client will pay Designer a total fee of $12,000, payable as follows: $4,000 upon execution of this Agreement; $4,000 upon delivery of initial concepts; and $4,000 upon Client’s approval of final deliverables. Invoices are due within 30 days of receipt. Late payments accrue interest at 1.5% per month.
Confidentiality
If either party will share sensitive business information such as pricing strategies, customer lists, or trade secrets, a confidentiality clause prevents the receiving party from disclosing or using that information outside the scope of the agreement.
Example: Each party agrees to keep confidential all non-public information received from the other party in connection with this Agreement, including business plans, financial data, and customer information (“Confidential Information”). Neither party will disclose Confidential Information to any third party or use it for any purpose other than performing its obligations under this Agreement. This obligation survives for three years following termination of this Agreement.
Representations and Warranties
These are factual promises each party makes about itself. A service provider might warrant that its work won’t infringe anyone’s intellectual property. A seller might warrant that goods meet certain specifications. A false representation gives the other party a claim for breach.
Example: Designer represents and warrants that: (a) Designer has the authority to enter into this Agreement; (b) all deliverables will be original work and will not infringe the intellectual property rights of any third party; and (c) Designer will perform all Services in a professional and workmanlike manner.
Indemnification
Indemnification shifts the financial risk of certain problems to the party best positioned to prevent them. If a designer’s work accidentally infringes a trademark, the indemnification clause determines who pays for the legal fallout.
Example: Designer will indemnify, defend, and hold harmless Client from any third-party claims, damages, or expenses (including reasonable attorney fees) arising from a breach of Designer’s representations and warranties under this Agreement. Client will promptly notify Designer in writing of any such claim and cooperate in the defense.
Limitation of Liability
Without this clause, a party could theoretically be on the hook for unlimited damages. Limitation of liability provisions cap exposure, often at the total fees paid under the contract, and typically exclude indirect or consequential damages like lost profits.
Example: Neither party’s total liability under this Agreement will exceed the total fees paid or payable to Designer during the 12 months preceding the claim. Neither party will be liable for any indirect, incidental, or consequential damages, including lost revenue or lost profits, regardless of whether such damages were foreseeable.
Termination
Spell out how either party can end the relationship, both for convenience and for cause. Include how much notice is required and what happens to work in progress and unpaid fees.
Example: Either party may terminate this Agreement for convenience by providing 30 days’ written notice. Either party may terminate immediately upon written notice if the other party materially breaches this Agreement and fails to cure the breach within 15 days of receiving written notice of the breach. Upon termination, Client will pay Designer for all Services performed through the termination date.
Force Majeure
A force majeure clause excuses performance when extraordinary events beyond a party’s control prevent it. Typical triggering events include natural disasters, wars, epidemics, and government actions. Courts in some jurisdictions read these clauses narrowly, only excusing performance for events specifically listed, so be thorough.6Legal Information Institute. Force Majeure Economic downturns and mere difficulty generally don’t qualify.
Example: Neither party will be liable for delays or failure to perform caused by events beyond its reasonable control, including natural disasters, pandemics, government orders, acts of war or terrorism, labor strikes, and widespread utility or internet outages. The affected party must notify the other party promptly and use reasonable efforts to resume performance. If the force majeure event continues for more than 60 days, either party may terminate this Agreement.
Dispute Resolution
Going straight to court is expensive and slow. Many contracts require mediation or arbitration first. Mediation uses a neutral facilitator to help the parties negotiate a resolution. Arbitration is more formal: an arbitrator hears both sides and issues a binding decision.
Example: Any dispute arising out of or relating to this Agreement will first be submitted to mediation administered by the American Arbitration Association under its Commercial Mediation Procedures. If mediation does not resolve the dispute within 60 days, either party may pursue binding arbitration or litigation in accordance with this Agreement’s governing law provision.
Governing Law and Jurisdiction
When parties sit in different states or countries, this clause decides which jurisdiction’s laws apply and where disputes get heard. Pick a jurisdiction with a logical connection to the deal.
Example: This Agreement will be governed by and construed in accordance with the laws of the State of Oregon, without regard to conflict-of-laws principles. Any legal action arising under this Agreement will be brought exclusively in the state or federal courts located in Multnomah County, Oregon, and each party consents to the jurisdiction of those courts.
Entire Agreement and Severability
An entire agreement clause (sometimes called an integration or merger clause) establishes that the written document is the complete deal, preventing either side from later claiming that verbal promises or earlier drafts are part of the agreement.7Legal Information Institute. Integration Clause A severability clause works as a safety net: if a court strikes down one provision, the rest of the contract survives.
Example — Entire Agreement: This Agreement constitutes the entire agreement between the parties and supersedes all prior discussions, negotiations, and agreements, whether written or oral, relating to the subject matter of this Agreement.
Example — Severability: If any provision of this Agreement is held invalid or unenforceable by a court of competent jurisdiction, the remaining provisions will continue in full force and effect.
Signatures
Signature blocks should include printed names, titles (for anyone signing on behalf of a company), and the date each party signs. If the parties sign on different days, the contract typically takes effect on the date the last party signs.
How to Actually Draft the Document
Start by writing down, in plain language, what you and the other party agreed to. Forget legal formatting. Just capture who does what, by when, and for how much. Most bad contracts come from skipping this step and jumping straight into clause templates that don’t match the actual deal.
Once the substance is clear, organize it into the sections above. Use clear, specific language. “Designer will deliver initial logo concepts within 21 calendar days” is enforceable. “Designer will deliver work in a timely manner” is an invitation to argue. Wherever you’re tempted to write something vague, force yourself to pick a number, a date, or a measurable standard.
After drafting, read the whole document from the other party’s perspective. Look for obligations that only bind one side, ambiguous terms that could be read two ways, and gaps where neither party’s responsibility is clear. These are the pressure points that produce disputes. Having the other party review and negotiate isn’t a sign of distrust; it’s how you build a contract that reflects what both sides actually expect.
For agreements involving significant money or complex obligations, having an attorney review the document before signing is worth the cost. Attorney review fees for standard contracts typically range from roughly $180 to $650 per hour depending on the market, but catching a single problematic clause can save many times that amount.
Signing Electronically
You don’t need to print, sign, and scan. Under federal law, a signature or contract cannot be denied legal effect solely because it’s in electronic form.8Office of the Law Revision Counsel. 15 USC 7001 General Rule of Validity Clicking “I Accept,” typing your name in a signature field, or drawing your signature with a stylus all count as valid signatures for most contracts.
To hold up in court, the electronic signature should be clearly linked to the person who signed. Most e-signature platforms handle this automatically by logging signer details, timestamps, and IP addresses, which creates an audit trail that proves who signed, when, and from where. Both parties also need to consent to conducting the transaction electronically.
A few categories are carved out of these rules, including wills, family law matters, and certain court filings. For standard business and personal contracts, electronic execution is legally equivalent to ink on paper.
What Happens if Someone Breaks the Contract
The clauses you include matter most when a deal falls apart. When one party fails to hold up their end, the other has several potential remedies. The goal is to put the harmed party in the same economic position they’d have been in if the contract had been performed, not to punish the breaching party.9Legal Information Institute. Breach of Contract
- Compensatory damages cover the value of what you were promised but didn’t receive, minus any costs you saved by not having to finish your own performance.
- Consequential damages cover losses that flow indirectly from the breach, like lost profits from a deal that fell through because the breaching party didn’t deliver on time. These are only recoverable if the losses were foreseeable when the contract was signed.
- Liquidated damages are a pre-agreed amount written into the contract that becomes payable upon breach. Courts enforce these as long as the amount represents a genuine estimate of likely harm and isn’t a punishment.9Legal Information Institute. Breach of Contract
- Specific performance is a court order requiring the breaching party to actually do what they promised. Courts typically reserve this for situations where money can’t make the harmed party whole, such as contracts involving unique property like real estate.9Legal Information Institute. Breach of Contract
One rule many people overlook: if the other party breaches, you can’t let your losses pile up. Courts impose a duty to mitigate, meaning you’re expected to take reasonable steps to minimize the damage. If a vendor fails to deliver supplies, you need to find an alternative source rather than shutting down operations and billing the vendor for months of lost revenue.9Legal Information Institute. Breach of Contract Statutes of limitations also restrict how long you have to sue for breach of a written contract. The window varies by jurisdiction but generally falls between four and ten years from the date of the breach.
Changing the Contract After It’s Signed
Circumstances change, and contracts often need updating. An amendment formally modifies specific terms, such as adjusting a deadline, changing a price, or adding a deliverable, without scrapping the entire agreement. An addendum, by contrast, adds entirely new terms that weren’t in the original deal.
The process is straightforward. Identify what needs to change, confirm all parties agree, draft the amendment with clear references to the original contract sections being modified, and have everyone sign it. Attach the signed amendment to the original. Any amendment should state explicitly that all other terms of the original agreement remain unchanged.
Example — Amendment: This First Amendment to the Agreement dated January 15, 2026, between Greenfield Design LLC and Maple Street Bakery Inc. amends Section 3(b) to read as follows: “Client will pay Designer a total fee of $14,500.” All other terms and conditions of the original Agreement remain in full force and effect. This Amendment is effective as of March 1, 2026.
Before anyone signs the original or an amendment, every party should read the final draft in full. Pay particular attention to indemnification obligations, liability caps, and termination conditions. These are the clauses that matter most when things go wrong and the ones people are most likely to gloss over.