FUN WORLD

In order to write a contract agreement, you also need to understand some basic terms related to contracts. A contract is an agreement that is legally binding once accepted and is backed up by the concept of consideration. A contract can be in both forms, either written or oral.The consideration of a contract basically makes it legally binding. Looking at the different systems of corporate law, that are followed and established throughout the world, the word 'contract' means a legally binding document. On the other hand, an agreement does not have to be legally binding when it is not backed up by consideration.

A famous case law Balfour vs. Balfour, that is studied by all in the corporate law, draws the distinguishing line between a legally binding contract and a common or domestic arrangement. In this case, a husband who worked overseas, had made an arrangement to send his wife a monthly allowance. However, when he discovered that his wife had been unfaithful to him, he stopped the allowance. The wife filed a case against her own husband in response. The courts observed that since this was a domestic arrangement between the husband and wife, the husband was not legally obliged to pay the amount, as it was not a contract. It ruled that it was not a binding contract because the consideration was absent from the arrangement. It must be however noted, that contract agreements can be signed on a domestic as well as a corporate level.

How to Write a Legal Contract?
Many people believe that writing contracts is a very easy task. However, it is pretty difficult to write contract agreements. To write contract agreements you can follow some of the following steps.

Write Contract Agreement #1 - Negotiation
The first step is negotiation, so brush up on your negotiation skills. During the process of negotiation, the goods and services that are to be exchanged for the consideration, are decided. When you want to write contract agreements, it is very important that all parties must be well informed and must also be aware of the of goods and services that are to be exchanged for consideration, during the honoring of the contract.

Thus, when you write a contract agreement, the step of negotiation is used to establish the ratio and proportion between the amount of goods or services that are to be traded.

Write Contract Agreement #2 - Phrasing the Elements of the Contract
When you write a contract agreement, it is extremely essential that one knows how to phrase the contact agreement. The phrasing of the contract agreement must be kept simple and must also be straight forward. The following are the most important elements that should be included, when you write a business contract or even any other domestic contract.

• Consideration
• Existence of more than one party
• Goods or services, or any item or property that is to be traded in return of the consideration
• Legality of all terms and conditions
• Time period or maturity, or the date of execution
• Acceptance of all the involved parties, in the signature and seals

Write Contract Agreement #3 - Penalty and Extension
Sometimes, when you write a contract agreement, you need to include the clause related to the extension of the time period and also the penalty or compensation, that is to be paid to the party who breaches the contract.