When small businesses write their own client agreements, it is helpful to follow smart drafting policies. Below are five simple rules you can use.
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Obligations are things a party must do. You should use “shall” or “will” to create obligations. (Obligations also create “rights” on the other side. In this example, Bob has a right to expect Gene to perform.)
Example: Gene shall work at Bob’s restaurant on Saturday from 3pm until 11pm.
Alternate: Gene will work at Bob’s restaurant on Saturday from 3pm until 11pm.
Discretionary authority gives a party the choice of whether or not to do something. Use “may” to create discretionary authority.
Example: Gene may terminate his employment at anytime.
Conditional statements require one thing to happen before another thing. You should use the “If x, then y” format to create conditional statements.
Example Obligation: If the Wonder Wharf Wonderdogs play in the World Series, then Gene shall work each game day from 5pm until 11pm.
Example Discretionary Authority: If Gene gets a date for the prom, then Gene may skip work on prom night.
A representation is a statement that a certain thing is true. If it isn’t true, then that would be a misrepresentation.
Example: Gene represents to Bob that Gene can lift 20 pounds.
When you need to define a word, establish how a contract is to be governed, or address the scope of an agreement, use simple policy language.
Example: “Intellectual Property” means all copyrights, trademarks…
Example: Missouri law governs this agreement…
Example: This agreement terminates on December 31, 2022.
There’s so much more to learn! Here are a few related guides you should read: