Contracts, in one form or another, have been around for centuries. There were few written contracts in earlier times, and people made deals with a simple handshake. While verbal agreements still apply in certain situations, most businesses put their contracts in writing for one simple reason: If (when) something goes wrong, a written contract can protect both parties in a court of law.
What is a contract?
A contract is a legally enforceable agreement between at least two parties who wish to exchange something of value. While all contracts are agreements, not all agreements are contracts.
Agreements only become contracts if they give rise to a legal obligation, include some form of consideration, and involve freely consenting parties who are competent to contract. Examples of agreements that are not considered contracts include terms and conditions agreements, privacy policies, and gentlemen’s agreements. Read more about agreement vs contract.
How to write a contract
Contracts must of course contain all the requisite elements of a contract that make it legally binding on the parties agreeing it. But there's more to contracts than just getting the legal basics in place.
When contracts are vague and hard to understand, parties may be reluctant to sign them, and the process often slows to a crawl. That's a problem for any company, because contracts are critical to commerce. For a company to become and remain profitable, it’s essential to keep contracts moving forward, and make them easy to sign. Here are some ways to take the friction out of contracts:
- Increase processing fluency. If a contract makes sense and is easy to process, people are more likely to trust what it says and agree to its terms.
- Determine your overall strategy. To reach an agreement as quickly as possible, you should examine the history of negotiation, determine the terms you are typically willing to concede, and soften those to remove potential friction to speed up signing.
- Include the critical information upfront. Instead of burying essential clauses in the middle of a contract, put the good stuff at the front or in a schedule at the end. Why force the other parties to hunt through the document to find the information you know is most important to them?
- Be as brief as possible. When was the last time you read a long contract through to the end? Extremely lengthy contracts are often skimmed over and not fully understood by the parties involved. To get your contracts read, you need to say as much as you can in the least number of words in plain English with no repetition.
- Consider your audience. Many contracts are not especially reader-friendly. To be more palatable, contracts need to focus on the agreement’s purpose and make it easier for all parties to obtain their desired outcome.
- Benchmark your process. Rather than automating an inefficient process, do some benchmarking by focusing on plain language and readability to speed up your contract lifecycle and negotiation time. When you’re ready to automate, your process will be more efficient for everyone involved.
Assuming that what the contract is selling is something of value and someone is willing to buy it, it should always be possible to write a contract that allows each party to achieve its objectives.
How to create a contract
There are many ways to create a contract - and here we're talking about the document creation process itself, rather than the words contained in the document. Many people choose to do it in Microsoft Word - and why not? Over one billion devices worldwide can run Microsoft Word, and the platform ‘hosts’ most of the contracts currently in existence at one point or another.
There’s just one problem: Microsoft built Word to be an all-purpose word processing tool, not a platform to create and manage contracts. Contracts created in Word are usually made by copying and pasting from existing Word documents or templates completed manually. This process often leads to deviations from the initial terms, misunderstandings between the parties, and negative consequences for everyone - particularly when trying to wrestled with version control.
However, there is a better option – automation. The Juro platform offers an in-browser template editor custom-built for contracts. Our system brings together contract text, integrations, native eSignature, and a dynamic repository formed on a flexible data layer, allowing you to query your data at any time during the contract lifecycle, removing information silos across teams.
There are three ways to create a contract in Juro. You can:
- write one from scratch;
- drag and drop an existing PDF into the Juro platform; or
- create a template and automate the workflow – our suggested method.
Click above to try it.
The contract template process
With a contract automation platform like Juro’s, users can automatically generate contracts by following the steps below:
- Create a dynamic template. An attractive contract template with engaging branding can mean the difference between a strong business relationship and a poor outcome.
- Build and send self-serve contracts. Teams use a Q&A flow to enter contract data – names, addresses, and dates – into smart fields. Metadata will automatically populate a searchable contract.
- Streamline the approval workflow. With Juro, stakeholders can get routine contracts approved quickly thanks to an automated workflow, dramatically speeding up the contracting process.
- Collaborate internally. Team members can collaborate with colleagues in real-time on contracts – no need to worry about audit trails and version control.
- Negotiate in-browser. Counterparties have the ability to negotiate a contract without having to move into Word and lose audit trails and data. Endless email tennis is over.
- Drop-in signing blocks. Juro’s mobile-responsive, native eSignature tool allows teams to sign contracts anywhere, at any time. In a high-growth environment, this capability eliminates backlog and will enable signatories to speed contracts through faster.
Results that move the needle
Teams that trust their contract creation to Juro report a dramatic impact on their contract workflow:
“Up to 30 per cent of the legal function’s time is won back through not having to do low-value tasks"
“There’s no greater ROI than the fact that by enabling our teams to self-serve, Juro reduced our need to hire a second lawyer"
“We create and send so many documents through Juro now - from supplier contracts, to terms of business, to onboarding forms. It takes minutes, end-to-end.”
As these and many other organizations have found (including Deliveroo, Cazoo, Trustpilot and Babylon Health), it is much easier (not to mention accurate and efficient) to create contracts digitally. If you want to find out more about how the Juro platform will streamline your process, hit the green button below.