Small businesses depend on contracts daily, whether they’re dealing with suppliers, clients, or partners. Knowing how to make a contract agreement for your small business ensures all parties understand their responsibilities and rights.
Below, we’ll provide the steps to creating an effective and comprehensive contract agreement document that can help you avoid misunderstandings, foster trust, and secure your business operations. First, let’s understand a few basics.
What is a contract agreement?
A contract agreement is a structured document that formalizes an understanding between two parties. The parties could be people, businesses, or other legal entities. It’s a legally binding document that clearly outlines the terms and conditions of the arrangement between the parties.
It spells out clearly what each party is obligated to do, the timeline for these obligations, the payment terms, and any other important aspects relevant to the agreement.
Why are contract agreements important?
Contract agreements are important for various reasons:
- Clarity: They reduce the chances of misunderstandings by clearly defining the terms of the agreement, including deliverables, timelines, and payment terms.
- Protection: They protect the rights and interests of all parties involved in the agreement by providing frameworks for resolving disputes.
- Risk management: They help mitigate financial risks in projects by detailing protocols for scenarios like delays or unforeseen circumstances.
- Professionalism: They demonstrate that your business operates with a high level of integrity and is committed to honoring its commitments.
- Record keeping: They serve as official records of business transactions that can be referenced in future dealings or audits.
What’s needed for a contract agreement to be binding?
It’s important to understand what makes a contract agreement binding so that you know the elements that need to be included. To be legally binding, a contract agreement must include:
- An agreement
- Parties involved
- Consideration (value exchanged)
- Legal capacity of the parties involved
Contract vs. agreement
While both are intended for the same purpose, there’s a fundamental difference. A contract is legally binding, whereas an agreement is not. An agreement can become legally binding if it includes the above-mentioned elements.
An agreement is an informal understanding between two parties. It may or may not be in written form. However, a contract is formal, legally binding, and always written. You can say that all contracts are agreements, but not all agreements are contracts.
How to create contract agreements using Google Forms for free
Before we get on with the steps to creating a contract agreement using Google Forms, it’s important to understand a few things. While you can create a contract document with this free platform, Google Forms aren’t legally binding. We’ll show you a way to make them so, though.
However, if you’re looking to simplify the legal processes in your business with Google Forms, you can certainly do that. Learn how to improve your legal workflow with Google Forms.
Step 1: Create a new Google Form
Navigate to your Google Forms.
Start a new form by clicking on the ‘Blank form’ button.
Title your form appropriately. In the description section, mention the date on which the contract is made and include the complete names of the parties involved.
Step 2: Include the agreement in plain language
Next, click the ‘add title and description’ button to add a title and description box to your form/document.
Title this box ‘Agreement’ and insert your agreement statement. An agreement statement is a declaration by both parties expressing their mutual understanding and acceptance of the terms of the contract agreement. This forms the foundation of the contract agreement.
Step 3: Define applicable parties
Introduce another title and description box to this form.
Enter the title ‘Applicable parties’ and a complete description of the two parties, whether they’re individuals or businesses. The description should include full legal names and addresses.
Step 4: (optional) Include a spot for consideration
Now, we could include a consideration for the goods/services that will be exchanged between the two parties. This means clearly outlining the payment amount the party delivering the goods/services will receive.
For this, introduce another title and description box in your form. Enter ‘Consideration’ in the title and indicate clearly the amount in figures that one party is due to pay another. Also, mention when the amount will be due.
If you’re wondering if there’s a way to tie up the payment to this form, learn about how to include payment in Google Forms.
Step 5: Include terms, conditions, and acknowledgment of competence
Let's add the terms and conditions first.
Use a title and description box to insert all relevant terms and conditions that need to form part of this contract agreement. Now, let's add the acknowledgment of competence.
Use another title and description box to enter the statement for acknowledgment of competence. Now, technically, even though your form is done, it’s not legally binding until both parties sign it. Let’s see how you can do that in the next step.
Step 6: Use Form Publisher to create the document
This is a digital form, but you can easily convert it into a professional document with Form Publisher. Form Publisher allows you to automatically create documents using Google Forms. Once you have it in a document form, you can have it sent to both parties to be signed. Learn how to collect e-signatures in Google Forms.
Create contract agreements with ease using Form Publisher
With that, your contract agreement is complete! It’s tremendously convenient to make your own contract agreements in Google Forms and then use Form Publisher for that extra bit of functionality.
If you regularly make contract agreements, you can even route them through various parties or even create entire legal workflows with Form Publisher! Want to know how? Explore Form Publisher!