1st question: How do I form a good contract?

Meeting of the minds

1st  question: … Many lawyers have said that their “contracts” course in law school was tough.   Since so much of business success depends upon a good contract, for a non-lawyer, what are some reference books to introduce some of the elements of contract formation? … Carl

3 thoughts on “1st question: How do I form a good contract?”

  1. Steve … “gray hair” for contracts is indeed an asset. In addition, there are folks in real estate RELATED industries (I.E.- contractors, vendors, suppliers, job-shops, etc) who may not have access to standard contract forms. …

    Further, one may forecast that much of the new economic growth may be coming from small & mid scale business where that contemplated deal is a new item – a new product – new project – even a new location in a new country. Thus, much of the discussion prior to bringing on the attorneys can set the stage for success.

    Also, assuming even more growth via ‘non-bank’ funding resources (such as but not limited to crowd funding – etc) not only for residential, but with small / mid scale commercial – it’d seem the broad foundation to understand many of the basics for contract formation will help.

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  2. The more experience you have, the better your contracts will get. Knowing the elements of contract formation is the starting point. Then, having an inventory of clauses that you can use to cover specific situations also helps. Being able to write clearly and concisely is probably the biggest benefit – but that doesn’t happen overnight, either.

    To quote Clint Eastwood, “A man’s got to know his limitations.” Real Estate brokers and salespersons are licensed to complete forms, not to draft contracts – which is really the practice of law! I would suggest that if there is a lot of money on the table, it may be better to have an experienced transactional attorney draft that contract for the client. If everything goes right, it may be a waste of money. But if anything goes wrong, you will be glad that you passed this aspect of the transaction off to a professional. Do you really want that responsibility?

    Most real estate brokers maintain an addendum to the purchase agreement, which contains terms which their lawyer has helped them put together, to make sure that their transactions close escrow, and that the real estate broker gets paid for their services. It’s the only way to effectively modify a large number of contracts to say the same thing = all agents working for Broker Bob will use that addendum on each of their transactions, along with a specific form. Over time, that addendum grows, as new things are encountered in the marketplace, which make sense to be added to the list for future use.

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  3. Here are a few good references to help with contract formation …

    a) … “Business Law” by Wyatt & Wyatt (I have an old edition, but it explains some basic concepts)

    b) … “Working with Contracts – What Law School Doesn’t Teach You” by Charles Fox (2nd ed, Practicing Law Institute)

    c) … “Contracts” by Claude D Rohwer and Anthony M. Skrocki, 2006 pub by Thompson-West

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