Attorneys are hesitant to encourage people to prepare their own contracts, especially because there are hundreds of aspects to every contract that experienced attorneys can ensure are included. There are also common pitfalls in contracts that attorneys can ensure are not inadvertently included.
However, for those people who may prepare their own written contracts, there are several considerations that can help make those contracts more workable and enforceable.
Importantly, non-attorneys are prohibited from preparing contracts for other people unless the preparer is a party to the agreement.
For instance, my dad, who is not an attorney but who knows agriculture inside-out, is not permitted to help his neighbors enter into a contract for the sale of a tractor — unless my dad is the buyer or seller of the tractor.
The best contracts obviously come from experienced attorneys. Internet contracts are worse than ever because of the involvement of AI. But when an attorney is not immediately available, the parties to a contract are reminded of the requirements that they learned in school about good stories: who, what, why, when and how.
Contracts involve people or businesses. The people and businesses involved in a contract are called parties. A good contract will identify all of the parties who are affected in any way by the contract.
The topic of the contract needs to be set out in detail, too. When the contract involves services or the purchase of items or real estate, the contract needs to specify the items that are being bought, sold or modified. Typically, inclusion of serial numbers or vehicle identification numbers is not required. However, the contract’s description of the items or services should be specific enough that a random person off the street could come in and identify the topic of the contract.
Thus, if a seller has four 1995 Mustang cars, although a VIN for the car that is the topic of the purchase may not be required, it might be incredibly helpful, especially if more than one of the cars are the same color.
A brief statement of why the buyer and seller are undertaking their deal is also advisable. This information usually does not need to be very detailed, but it helps explain and amplify the “when” portion of the contract.
For instance, if the buyer is buying a video game to resell in two weeks, the contract may state that the sale will happen within two weeks, but if the contract were ever interpreted by a judge, the judge may not be as literal in interpreting the importance of the deadline date if there is no “why.”
Obviously, dates and deadlines are important, and in real estate contracts they are extra important and need to state that “the dates matter,” which is covered by the words, “time is of the essence.”
The how component in a contract is important so that the buyer does not expect the goods before paying the money, and the seller does not pay the money without the goods.
Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at [email protected] or at 419-659-2058. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.