How do you write a contract?

A working contract answers a short list of questions in a way both sides would read the same:

• Who is agreeing, by their full legal names.
• What each side will do, deliver or pay.
• When it happens, and what "done" looks like.
• How much, and when the money moves.
• What happens if it goes wrong, changes or ends early.
• Which law reads the words, and where a dispute goes.

Lawyers describe the ingredients of a contract with words like offer, acceptance and consideration. The glossary covers those. This guide stays with the practical side: what to decide, and how to write it down so it is hard to misread.

Drafting goes faster when the decisions are already made. A checklist that covers most client work:

1. The type of deal. One job, ongoing work, a retainer, a hire, or a disclosure before a deal. This picks the template.
2. The scope. The deliverables, in a list. What is out of scope, also in a list.
3. The price model. Fixed fee, day rate, monthly retainer, or per deliverable.
4. The payment schedule. Deposit, milestones, or invoice on completion. Days to pay.
5. Ownership. Does the client own the work outright, or get a licence to use it?
6. Risk. Is there a cap on what either side can claim? Any indemnities?
7. The exit. How either side can end it, on what notice, and what is paid for work done.
8. The governing law. Which legal system reads the contract. This guide does not recommend one.

If you cannot answer one of these yet, that is usually the conversation to have with the other side before drafting, not after.

Use full legal names, not trading names. For a company, that usually means the registered name, the company number and the registered address. For a sole trader or freelancer, the person's own name, with a trading name if useful.

Example

This agreement is between Northlight Studio Ltd (company number 01234567), whose registered office is at 1 Example Street, London ("the Studio"), and Ana Ruiz, trading as Ruiz Design, of 22 Sample Road, Leeds ("the Designer").

Short labels like "the Studio" and "the Designer" are easier to read than "Party A" and "Party B", and they make each obligation obvious at a glance.

This is the section most disputes come back to, so it is worth the most care.

• List deliverables as nouns. "A five-page marketing website", "three logo concepts", "one 30-minute edit".
• Say what is out of scope. "Copywriting and photography are not included."
• Name revisions. "Two rounds of revisions per deliverable."
• Define acceptance. Who approves, how, and what happens if they say nothing. A common pattern is deemed acceptance after a set number of working days.
• Name dependencies. What the client supplies, and by when, for the dates to hold.

For repeat work, the standing terms often go in a services agreement and each job goes in a statement of work. What a statement of work adds explains the split.

A clear payment clause answers five things: how much, when it is invoiced, when it is due, how it is paid, and what happens if it is late.

Example

The Client will pay the fee of 6,000 GBP in two parts: 50% on signature and 50% on delivery of the final files. Each invoice is due within 14 days of its date.

For business-to-business debts in the UK, statutory interest on late payment is set by order under the Late Payment of Commercial Debts (Interest) Act 1998, and gov.uk states the rate as 8% plus the Bank of England base rate (Late Payment of Commercial Debts (Interest) Act 1998, s.6; gov.uk guidance). Many contracts mention the Act so both sides know it applies.

Net 30, net 14, on receipt covers the shorthand, and the payment terms clause page has more wording.

Beyond the deal itself, most commercial contracts include a familiar set:

• Limitation of liability. A cap on what either side can claim. In England and Wales, liability for death or personal injury caused by negligence cannot be excluded or restricted by a contract term, and other negligence liability can be limited only so far as the term is reasonable (Unfair Contract Terms Act 1977, s.2).
• Intellectual property. Who owns what is made, and when ownership passes. Often on full payment.
• Confidentiality. What each side keeps private, and for how long.
• Termination. How either side ends it, and what is paid for work done.
• Governing law and jurisdiction. Which law reads the contract and which courts hear disputes.
• Entire agreement. That the signed document is the deal, not earlier emails.
• Third-party rights. In England and Wales, a non-party can enforce a term if the contract says so or if the term purports to benefit them, unless the contract shows otherwise, and contracts commonly exclude this right (Contracts (Rights of Third Parties) Act 1999, s.1).

Not every contract needs every clause. A short mutual NDA carries fewer than a services agreement.

Plain English is not informal English. It is the same meaning in fewer, more common words.

• One idea per sentence.
• Active voice. "The Client will pay" rather than "payment shall be made".
• Defined terms, used consistently. If it is "the Deliverables" once, it is "the Deliverables" every time.
• Numbers as numbers. "14 days", not "fourteen (14) days".
• No synonyms for variety. A reader assumes a different word means a different thing.

Example

Before: Notwithstanding anything to the contrary herein, the Supplier shall be entitled to suspend performance of the Services in the event that any sum remains outstanding.

After: If an invoice is unpaid 7 days after it is due, the Supplier may pause the work until it is paid.

The second version is shorter and it is also more precise: it says when the right starts.

A final pass that helps: read every "may", "will" and "must" in the draft. "Will" and "must" create obligations, "may" creates an option. Mixing them up is one of the most common ways a plain-English contract says something its writer did not mean.

Most problems in small-business contracts come from a short list of gaps rather than from complicated wording:

• Vague deliverables. "Brand refresh" or "website updates" without a list. Each side reads its own version into the words.
• No acceptance step. Nobody says when the work is finished, so the final invoice has no clear trigger.
• Unlimited revisions. Silence on revisions is usually read as "until the client is happy".
• Ownership on signature. IP passing to the client before it has paid, so the supplier gives away the work and then chases the invoice.
• No exit. No notice period or payment for work done, so ending early becomes a negotiation.
• Copied clauses that do not fit. A clause taken from a much larger contract, with defined terms that appear nowhere else in the document.
• Two versions in circulation. Each side signs a slightly different draft.

Each one is easy to fix at drafting time and hard to fix once the work has started. Reading the contract once from the other side's point of view catches most of them: if you were the client, or the supplier, where would you push?

Signing is the clearest evidence that both sides agreed to the same version.

In England and Wales, an electronic signature is admissible in evidence on any question about the authenticity or integrity of a communication or data (Electronic Communications Act 2000, s.7). The Law Commission's 2019 report says an electronic signature is capable in law of executing a document, including a deed, where the signer intends to authenticate it and any formalities are met.

In the US, the federal ESIGN Act says a contract may not be denied legal effect solely because it is in electronic form (15 U.S.C. 7001(a)). State rules are pending verification here.

A deed is different. It must make clear on its face that it is a deed, and an individual executes one validly only if signed in the presence of an attesting witness and delivered as a deed (Law of Property (Miscellaneous Provisions) Act 1989, s.1(2)–(3)). Deed or agreement explains when that comes up.

A few habits make the signed contract useful later:

• Keep one fixed copy. The signed version, not the last draft in someone's inbox.
• Put changes in writing. A short variation or a new statement of work, signed by both sides.
• Diary the dates. Renewal, notice periods, payment milestones.
• Know the time limits. In England and Wales, an action on a simple contract cannot be brought after six years from when the cause of action accrued; an action on a deed has twelve years (Limitation Act 1980, ss.5 and 8).

On Contracts.io, you describe the deal in a sentence, Lex drafts it, you share one link, and both sides agree and sign the same version. It is free for the other side.