How to Write a Contract By eHow Legal Editor Contracts are agreements which make personal and business agreements official and binding, ensuring our safety in entering upon such an agreement. Contracts are invaluable tools that help both you and the contractor understand the terms of your agreement and your individual obligations. Learn how to write an effective, legally-binding contract. Instructions Step1 Know that the process of writing, and also negotiating, through the contract is in some ways as important as the words you choose to write. It sets a tone for how you work together and hopefully displays a balance of flexibility as well as focus on the goals of the agreement. Step2 Negotiate a specific scope of work for a particular price and payment schedule, and communicate to clearly understand the nature of each. Once an agreement is communicated, translate these important arrangements into the content of your contract. Step3 Keep the wording in a contract as simple and straightforward as possible. Especially when dealing with technical information, contracts can become lengthy and difficult to read as a whole. If this is the nature of your contract, request that legal counsel oversee the drafted contract, as their detail-oriented eyes may catch loopholes or issues you wouldn't otherwise be concerned with. Use their advice to rectify the contract into one that you feel more secure about agreeing to. Step4 Include a clear work plan that offers specific deliverables tied to specific dates and deadlines. In advance, schedule progress reports and meeting times to discuss expectations and the quality of the work being completed. Step5 Determine who will own the property or other creations designated by the contract once obligations are complete. Both parties can have different views on this, so it is important to clarify. It can be especially tricky in terms of intellectual property agreements. Step6 Determine the terms required for each party to get out of the contract. Step7 Get signatures from both parties.