I Have A Contract For You

Some people actually know contracts to be "business", "deals" or "transactions". If it involves a lot of capital, other adjectives can be used so that other parties do not understand what is meant. Whatever it is, a contract may have been born.

By way of definition, a contract is an agreement between two or more people to enter into a legally binding transaction. Going by this simple understanding of what a contract is, it’s not all transaction that can be said to be a contract. How does someone know a valid contract?

A contract must have the following ingredients to make it a good one:

1. Putting it into writing

2. Simple language         continue after the cut

3. Spell out all financial obligations

4. State the exact parties

5. All intentions must be stated

6. Termination of the agreement

7. Resolution of all controversies

8. Keeping it very confidential

1. Putting it into writing:   An oral agreement may not be written off on its own but for its enforcement in courts or other tribunals; it becomes imperative to bring the agreement into writing in a particular document or documents. A contract that is written is valid and any party to it can easily make reference to any aspect of agreements in its execution.

2. Simple language: What I mean here is that every word or figure to be used in the contract document should be written in simple and clear words. All legal jargons or high sounding words like, "hereto wither the herein parties" should be avoided as much as possible. Some of these words may truncate the intention of the parties.

3. Spell out all financial obligations: This is very important. What is found in contracts is that some individual would be expected to part with some monies or other forms of capital while the others will be in receiving end of money and other benefit that would accrue from the transaction. So the parties should ensure to write down every monetary obligation that would be binding on the parties to the contract.

4. State the exact parties: This includes names, addresses, phone numbers, and other vital contact details essential for the transaction. The particular individuals or corporate bodies should be identified and properly designated in the contract document.

5. All intentions must be stated: It is not enough to say this or that was what was agreed on. The agreements must be written down. For example, if one of the parties to a construction transaction intends the driver of the Hilux Van of the other party to be in charge of artisan’s mobility to the construction site, it would be advisable to state it as it is. No matter how unimportant an item is to other people, it becomes expedient for the contract to clearly have that item if the parties so wish that it be included.

6. Termination of the contract: Would it be ok to close the deal after 10 months or some other period of time? Do the parties want the transaction to come to an end in the event of a default or by the completion of a particular thing? Would it be in writing or oral? All these must be included in the document so that no one action goes on infinito.

7. Resolution of all controversies: No kidding anyone issues or conflicts would come up. Some may be between the parties or other people that act for them. A provision must be made for their resolution. Be it by negotiation, arbitration, mediation or litigation in court, the parties must provide for conflict resolution module. 

8. Keeping it very confidential: This is one thing that most drafters of contracts do not consider most of the time. It ought to be between them and no other. Some figures, money and information would pass between them. These must be protected from people that are not privy or parties to the transaction. Thus the parties can include a non-disclosure or a non-circumvent clause to the contract.

The next time someone says, "I have a contract for you", do not hesitate to quickly do a checklist of all or some of these points. Let the law protect your deals.

Until next time, God bless your endeavors. Amen. Ciaos!

Alice O. Odibo is a legal practitioner and the principal partner at Odibo O. A. Co., a firm of legal practitioners & solicitors. She is a graduate of University of Benin and has 8 years experience in corporate and criminal litigation practice. She resides in Lagos. Contact details. 08057474161. aliceodibo@yahoo.com BB:26474A85