How to make contract

The best way to make a contract is to put your agreement in writing, which makes it easier to enforce. For the purpose of clarity and for the avoidance of ambiguity, contracts should be given a name and the parties to sign it should be named as well.

For instance, in a contract of sale, it is called a ‘sales agreement’ and the parties are; the seller and the purchaser connoting, the owner of the goods to be sold and the party buying the goods put out for sale respectively.
Also, the goods should be specified or services being exchanged as the case may be. Dates for the execution, delivery and receipt of the goods should be included in a contract of sale to avoid a clash of interest between parties should a deadline be fixed.

More so, a termination clause should be included so that the parties can legally end the contract without hiccups, as well as a space for parties to sign the agreement.


Under the legal parlance; a contract is described as an agreement between two or more persons which is binding and legally enforceable in the event of a breach.

If you are creating a contract for the sale of goods or the rendering of services, it is of paramount significance to note that you are expected to protect yourself by ensuring that the contract is legal and enforceable which implies that, it is actionable in a competent court of law in the event of a breach of same.

Knowing the elements necessary to create and execute a contract can help you institute an appropriate legal action where one party fails to execute his part of the contract.


Make a valid offer:  A valid offer has three elements; communication, commitment, and definite terms. This means you must communicate the offer in a written, oral or otherwise understandable form. Your offer must include a commitment to be bound to the terms of the agreement; the terms must be clear, precise and unequivocal. An offer has to be considered valid, and it must be ‘bona fide’ – in good faith.

This is a tricky concept in contracts generally which presumes that both parties will not manipulate the other to try to bend or break the terms through shifty tactics or twisting wording.

Think about consideration: This is the agreement by all parties about what they are going to do or refrain from doing. Consideration should be fair and equitable. For example, if your neighbor agrees to buy your car, her consideration is giving you money while, your consideration is surrendering the car in exchange for that money.Here, the consideration is considered fair if the value of the car is close to the price that is being asked. 

A fair offer will not provide conditions that are unlikely or impossible to fulfill.

A contract with an equitable consideration does not seek to place an unusual burden on the contracting parties, it is usually unambiguous.

Negotiate offer acceptance: An offer is meaningless unless it has been accepted by the offeree [the party to whom the offer is made]. The offeree may accept an offer as it is or may change the terms of the offer. For most contracts, changing the terms of an offer negates the initial offer and creates a new ‘counter-offer’.

This can be accepted or rejected by the offeror [the party who set the terms of terms of the contract before the counter-offer suffices].

Take notes: If you plan on having a verbal or oral contract- which lawyers don’t recommend- taking notes at the time of making the agreement will help you if the contract is later challenged in court. Note taking can help when you draw up the written contract as you won’t have to rely on your memory of the terms because, they will all be written down.


Have a written contract: It is likely that in everyday use, many offers and counter-offers are oral rather than written [except real estate contracts]. However, it is crucial to have a written contract.

In Nigeria, by virtue of Section 4 of the Statute of Frauds which is a statute of general application relevant in Nigeria, ‘all land related contracts are to be reduced into writing.’ This is so in order to make them enforceable.

An oral contract, even if it is legal is far more difficult to enforce if one party does not uphold his side of the contract. For this reason, any contract involving important, expensive, or time-consuming consideration should be written to help courts rule on contracts in the event of a breach by parties privy to that contract.

Name the contract and the parties involved– The contract itself should have a name which connotes the context of its creation. [For example, a contract of sale, a tenancy agreement, etc.] Also, the parties should be specifically named, subsequently their roles in the contract can be used, ‘buyer’ and ‘seller’ rather than specific names.

Lay out the terms of the contract: The contract needs to specify the exact terms of the agreement. If goods or services are to be exchanged, the specific goods or services should be specified along with the expected return [money or an exchange of other goods or services].

You may want to include damages or remedies in the eventuality of a breach of the contract by a defaulting party. There are several types of damages for different situations like;

Liquidated damages: This sis instituted when the contract is breached, it includes monetary payment for defaulting.

Unliquidated damages: This type of damages cannot be measured monetarily, the court uses its discretion to award damages or grant relief to the party who suffered loss.

Include a termination clause– Many contracts especially those for a longer period of time require a termination clause. This clause allows parties know how to legally ‘get out’ of the contract without being held responsible for breaching it.

This is done with notice to the parties in the contract.

Provide dates and other details: To ensure a specific contract, be sure to include exact dates. Provide a deadline if necessary bearing in mind that, events or actions need not occur on a specific date; the phrase ‘on or before’ can be used preceding the deadline.

A signature area is important: Parties should be accrued space to sign and print their names. Space for providing the date the signature is affixed is necessary to the contract; witnesses could be present to sign the document. They are required for wills, deeds, mortgages, and marriage contracts depending on the law of the place.


Parties must have the capacity to enter into a contract: to enter into a contract, parties involved must be legal adults (over 18 years of age), of sound mind, and free of mental incapacity that precludes their understanding the contents of the contract.

Being of sound mind when entering a contract means that a person cannot be legally bound to a contract if he or she is intoxicated or mentally impaired.

Do not write a contract for illegalities: a contract is void ab initio and unenforceable if the goods or services in the contract are illegal. For example, you cannot contract someone into prostitution services where it is considered illegal. Similarly, you cannot have a contract involving the sale of an illegal substance such as hard drugs and narcotics.

Avoid coercion: a contract becomes voidable if a person is coerced, threatened or blackmailed into signing the contract. All parties must enter the contract willingly and freely for the contract to be legally binding.

Avoid fraudulent claims or terms within the contract: Be sure that claims and conditions mentioned in the contract are devoid of fraud.

Contracts based on fraudulent premises, whether or not the fraud was intentional, are not legally enforceable.

For instance, you cannot enter into a contract to sell your car to your neighbor if you are not the rightful owner of the car. Laying claims to the car that is not yours constitutes fraud which will make the contract void ab initio.

It would suffice to say that, when signing a contract the parties should sign as many copies as needed in order for each party to keep one original copy for him or herself.

Be sure your contract is clear, as it does not need to be elaborated upon or in ‘legalese’ in order to enhance its enforceability by a court.

It only needs to clearly describe the terms, which the parties are legally obligated to abide by else, damages would be paid when a breach occurs.

3 thoughts on “How to make contract

  1. Wow what a beautiful piece….
    I recommend this article for business owners and young entrepreneurs

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