First and foremost, the purpose of a business contract is to accomplish the business goals of the company.  Start with the deal.  Determine the objectives of the deal and work backwards.  Remember, the purpose of the contract is to bring certainty to the transaction and to allocate risk between the parties.  The goal is to implement the business decisions of the parties.

 

            A contract require three basic elements: Offer, Acceptance and Consideration.  These three elements are like the legs of a tripod holding up the contract.  Without all three the contract cannot stand.  Regardless of any other terms are included in a contract, you must ensure that these three concepts are there.

 

            An Offer is made with the intention of created an agreement.  The offer must be capable of being accepted and be complete.  Acceptance is the unconditional agreement to the offer.  It must be unconditional or it becomes a Counter Offer, which would then need to be accepted by the person making the original offer.  Once there is an unconditional acceptance of an offer, there is a contract, provided there is Consideration.  Consideration is the benefit and burden of the contract to the parties.  Each party must get something of value out of the agreement.  A common form of consideration would be a party pays money and receives services.  Consideration can be almost anything of value.

 

            Once these three elements are in place, the remaining terms and conditions needed to define the transaction can be added.  If the contract is at all complicated, consultation with an attorney can be very beneficial.  There are many issues which, if addressed up front, can save a lot of trouble down the line.  Part of the role of an attorney in drafting contracts is to help the business owner anticipate problems that might occur under the contract and set up ways to address them while the parties are still in an agreeable relationship.