How To Create A Free Contract Template

A well-written contract is crucial to protecting business interests. Defining terms and conditions beforehand ensures long-lasting relationships with customers, vendors, and employees. However, for expanding enterprises, it can take time to draft appropriate agreements to suit their needs every time. Moreover, they must ensure contracts adhere to laws, standards, and requirements. How can organizations quickly and effectively draft agreements? That’s where contract templates come in handy. Businesses can use pre-written templates and clauses to expedite the drafting process rather than starting from scratch each time.

What is the purpose of a contract template?

A contract template is a pre-written document that defines the terms and conditions of a legal agreement. It serves as a framework for drafting contracts for various purposes, including partnerships, services, employment, and sales. They typically include essential elements such as parties involved, scope of work, payment terms, deadlines, dispute resolution mechanisms, and other relevant details.

• Consistency and standardization

Regardless of the purpose, a contract's language, structure, and elements must be consistent across the board. Manual creation of agreements under different departments can cause irregularities in the content. Businesses can use pre-written templates to standardize contracts to avoid these complications. Thus, every contractual agreement upholds organizational, legal, and industrial standards without constant review from the legal team.

• Time and cost-saving

Contract templates also reduce the time businesses spend drafting sales, vendor, and employee agreements from the ground up. Any department or team can self-serve contracts for their specific purpose using templates in no time. The content is compliant and legally sound, without constant legal counsel oversight. Additionally, it gives the legal teams more time to concentrate on high-risk and high-value tasks.

• Legal protection and risk mitigation

Companies are vulnerable to lawsuits, breaches of contract, and other legal disputes that can severely impact their bottom line. They can proactively address potential issues and protect businesses from costly legal battles by incorporating key clauses into their contracts. Building contract templates with essential clauses like indemnity, liability, dispute resolution, and confidentiality can protect business interests and mitigate risks.

What are the tips for creating contract templates?

The first step in creating a competent contract is identifying clauses and terms essential to the business. It may include clauses related to payment terms, termination rights, indemnification, and dispute resolution. Organizations can ensure that their contract templates are comprehensive and cover all necessary provisions by identifying these key clauses and terms.

• Keep it simple and clear

When drafting a contract template, clarity is crucial. Businesses must use simple language that is easy to understand, avoiding jargon or legalese that may confuse the parties involved. They should clearly outline the rights and responsibilities of each party, the scope of work or services, payment terms, and any other critical details. A well-organized contract template with clear headings, sections, and bullet points can improve readability and comprehension.

• Use plain language

Avoiding overly complex language makes the contract easier to understand and reduces the risk of misinterpretation or disputes. They must clearly define any terms open to interpretation and provide examples or explanations where necessary. Using plain language ensures that both parties fully grasp the terms of the agreement and can adhere to them effectively.

• Seek legal review

Apart from establishing the clarity of contract language, businesses must also ensure they are legally sound. They must consult with a legal professional at every stage of the contract lifecycle, especially drafting. A thorough legal review of contract templates can help identify potential legal pitfalls, ensure compliance with relevant laws and regulations, and provide added protection for your business. A lawyer can also help tailor the contract to your specific needs and industry requirements.

• Customize for specific needs

Depending on the type of agreement, businesses may need to customize their contract template to include specific provisions relevant to that agreement. For example, a service agreement may require different terms and conditions than a sales contract. By customizing templates for various agreements, they can tailor each contract to meet the needs of each party.

What are some essential contract templates for businesses?

Contracts are the backbone of any business transaction. They serve as the foundation and provide legal protection for all parties involved. However, not all contracts are created equal. Businesses often need different contracts to address various aspects of their operations. It helps to comply with laws and regulations, mitigate risks, and address business needs.

1. Sales contract

Sales contracts are essential for businesses that sell products or services. These contracts outline the terms of the sale, including the price, delivery terms, payment terms, warranties, and any other relevant details. Businesses can avoid misunderstandings and disputes by having a competent sales contract. They can ensure that both parties are clear on their rights and obligations.

2. Employment contract

Employment contracts are crucial for businesses to hire employees. These contracts outline the terms of employment, including the job description, salary, benefits, working hours, and any other relevant details. It enables businesses to set clear expectations with their employees, protect their intellectual property, and mitigate the risk of legal disputes.

3. Service agreement

Service agreements are essential for organizations to provide services to clients. These agreements outline the scope of services, payment terms, timelines, deliverables, and other relevant details. It helps to establish clear expectations with their clients, protect their interests, and ensure that both parties are on the same page.

4. Non-disclosure agreement

Non-disclosure agreements (NDAs) are crucial for businesses that need to protect sensitive information. These agreements outline the terms under which one party agrees not to disclose confidential information to third parties. NDAs are essential for businesses that share proprietary information with employees, contractors, vendors, or partners, as they help prevent the unauthorized disclosure of sensitive data.

How to create a contract template

Several template generator tools are available to automate the drafting of contractual agreements. Some of the free contract template brands include:

• Rocket Lawyer
• Legal Zoom
• Jot Form
• Panda Doc

 
However, after contract drafting, businesses have to still depend on multiple platforms or email chains to negotiate, review, sign, and manage them. Dock contract management software, built on Office 365, offers an all-one platform to perform every contract-related task. It accelerates the entire contract lifecycle, including drafting. Here's how:

1. Selecting the contract type

The first step in creating a contract template is determining the contract type. Dock offers diverse options, such as SOW, NDA, MSA, commercial lease, etc.

2. Inputting relevant details

Once you've chosen the contract type, it's time to input the relevant details. It includes the contract name, party name, effective date, etc. Dock offers seamless integration with other business applications, enabling users to easily import data from CRM, ERP, or VMS systems. There is no need to manually enter data, which raises the possibility of human error.

3. Customizing terms and conditions

One of the key benefits of using contract templates on Dock is the ability to customize them to suit specific needs. Businesses can add or remove clauses, adjust timelines, and tailor the terms and conditions to reflect the agreement between the parties. The contract management platform has a clause library with all the relevant terms and conditions in concise language.

4. Reviewing and approving the draft

After creating the draft, it’s time for negotiation, review, and approval. Dock’s redlining capabilities allow users to review, comment on, and negotiate contractual agreements in real time. There’s version control and notifications to ensure everyone is on the same page as the document changes. 

Checking for errors, inconsistencies, or missing information is integral to contract generation. Depending on the contract type, businesses usually have several internal and external reviews to evaluate the document. It's also a good idea to have a legal professional review the contract to ensure compliance with relevant laws and regulations.

Dock offers automated workflows to route the document through relevant reviewers and approvers. They can create custom workflows with marketing, legal, and financial teams. The due dates and reminders eliminate unnecessary delays in the process.

5. Contract execution

Most template generators only enable users to create contract drafts. Beyond that, businesses have to depend on external applications to execute the contracts. However, Dock empowers parties to carry out the entire process, from drafting to execution, within a single platform.

The contract management platform has built-in Adobe Sign, DocuSign, and Sertifi integration for hassle-free signing. Users can trigger execution workflows to get the document to the right person on time for signing.  Even after contract execution, Dock offers features to stay on top of deadlines, renewals, performance, and compliance.

Summary

Efficiency is crucial in a fast-paced business environment. Hence, businesses require pre-written templates’ framework and flexibility to accelerate the contract lifecycle. Additionally, they can ensure consistency and accuracy in contract terms, reducing the risk of errors or omissions. It can be crucial for high-value documents where precision is paramount. 

Templates also provide security by incorporating industry-specific best practices and legal language. They provide a degree of accuracy and competency absent from manual contract creation procedures. By streamlining the contract drafting process, templates allow businesses to focus on the substance. Overall, utilizing contract templates within Dock’s contract management software is a sure-cut way to ensure productivity, accuracy, and compliance while saving valuable time and resources.