Effective Contract Drafting

Main Principles of an Effective Contract Drafting

Contract management is about a lot more than just writing contracts and getting them signed. In its essence, it’s about two parties that are willing and able to enter into a legal agreement together. The first step in that direction is, of course, contract drafting.

Contract drafting is the process of writing a legal agreement and tweaking it to fit both parties’ requirements. There are many elements that go into writing a legal contract, making it a rather tricky task. If you want to make it a bit easier, you can follow these principles:

The purpose of the contract

While contract drafting software can help you with the phrasing, it won’t create meaning for you. Before you get to writing, you need to know precisely what the purpose of the contract is. Usually, the contract outlines a transaction of some sort, but it doesn’t have to be financial. Without a clear purpose, the contract is basically useless.

That includes the contract’s terms and conditions. The terms and conditions will always include each party’s rights and obligations to the other party. They should also include the penalty each party will receive if the C&T is not met. To wrap it up, this section should include a detailed outline of how the transaction will be made, what is expected from each party, and so on. Don’t forget to include when the transaction takes place, the pricing model that the contract employs, the penalties for breaching the contract, and more. Be as thorough as possible.

The parties

Both parties need to be able to enter into the contract legally. There are several rules that apply to this. For instance, if it is found that one party was under the influence while signing the contract, it may lose its binding power. Similarly, a person who is not in their right mind cannot enter into a legal agreement. Finally, if a person was coerced into signing a contract and did so against their will, the contract is not legally binding.

When two parties sign a contract, they enter into a legal relationship or partnership. From that moment on, they must perform their duties outlined in the contract. If one party breaches the contract, there will be repercussions (which are also mentioned in the contract).


When it comes time to write the contract, you need to pay close attention to the terminology you use. Terminology commonly used in contracts pertaining to the pharmaceutical field, for example, will not be helpful in a simple contract between an employee and a corporation. Words and phrases can easily be misinterpreted and create confusion.

The same applies to typos and errors. An obvious typo might not be a big deal when it’s made in an insignificant sentence. A typo or mistake made in the contract-specific terminology can change the meaning of the contract completely.


Another thing that is often disregarded is details. Everybody always wants attention to point, but when it comes time to double-check the details, people tend to rely on simple writing software. Unfortunately, no program can tell you that you made a mistake in a foreign phone number or exotic last name. It’s up to you to check back all the details.


Writing contracts is not an easy task. There are certain risks and inefficiencies that you need to count on. Being able to predict these risks ahead of time and act on them before it’s too late is preferred. Of course, you won’t always be able to do that. Nevertheless, contract compliance is so substantial.

In order to prevent specific risks, consider implementing best practices and processes for each stage of contract drafting. The approval process, for example, should always follow a standard workflow. This way, you can avoid inconsistencies and keep track of the contract every step of the way.

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Christophe Rude

Christophe Rude

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