The structure of a contract is pretty standard. First, the contract will identify the parties. Next the purpose of the contract will be provided. After the purpose, a contract typically creates defined terms. The next section includes the substantive general provisions. Below the substantive provisions is a space for signatures, addendums, and schedules.

A good lawyer will define terms that are to be used throughout the contract. Rather than letting the other party define everything, or leave nothing defined at all, the lawyer should take the time to draft the contract terms. This helps remove any confusion as to what the contract means, if there is ever a dispute about contract interpretation. The following are a few principles attorneys should use when including definitions in the contract:

  • Place all the definitions at or near the beginning of the contract.
  • Throughout the text of the contract capitalize the terms to signify that the term is defined (this includes the text of the definitions).
  • Use common sense when defining terms: Don’t define what is commonly known as a “banana” as an “Orange.”
  • Use all the defined terms throughout the contract. Don’t define something if there is no use of it in the contract.

Will Laursen

Show Your Support

$5/month

Share
Table of Contents