Business people agreeing over a business contract

How To Create A Contract For Your Business

Creating a contract in business is essential because it helps to establish a transparent, legally binding agreement between parties. It sets out the expectations, roles, and responsibilities of all involved, decreasing misunderstandings and potential disputes. Contracts ensure a written record of the agreed-upon terms, which helps to clear up any discrepancies along the way. Promoting understanding and trust is necessary and provides a secure framework within which business transactions can occur, protecting the interests of all parties involved.

Steps for Creating a Contract

Creating a contract for a business in Pennsylvania involves several steps to ensure that the agreement is legally binding, clear, and enforceable. 

  • Identify the Parties And Define The Terms And Conditions: Identify the legal names of the parties involved in the contract, which includes businesses, individuals, or other entities. Make sure to use the complete legal names and titles, such as “LLC,” “Inc.,” or “Ltd.,” where applicable. You should also specify each party’s rights, obligations, and responsibilities. You will want to include the scope of work, deliverables, timelines, and any other expectations. Be as specific as possible to avoid any misunderstandings.
  • Specify Payment Terms: Clearly outline the payment terms, including amounts, due dates, methods of payment, and any late payment penalties. You will also want to include terms for deposits, retainers, or installments if that is applicable.
  • Include Warranty and Liability Clauses: Define any warranties provided and the limits of liability for each party. You should ensure that you include what happens in the case of non-performance, defects, or breaches of contract.
  • Address Confidentiality, Non-Disclosure, and Non-Compete Agreements: If necessary, include clauses that restrict disclosure to third parties, protect sensitive information, or prevent parties from competing directly with each other for a specified period.
  • Include Termination Clauses: Specify the conditions under which either party may terminate the contract, including notice requirements and what happens concerning unfinished work or outstanding payments.
  • Outline Dispute Resolution Procedures: Detail how you will resolve any disputes that arise with the contract. Options include negotiation, mediation, arbitration, or litigation. Specify if the governing law and jurisdiction will be in Pennsylvania. 
  • Procedural Requirements – Signature And Dates, Notarization, As Well As Retention Of Copies: Ensure that all parties sign and date the contract. This formalizes the agreement and indicates that all parties understand and agree to the terms. Electronic signatures are generally acceptable, but ensure they comply with Pennsylvania and federal e-signature laws. Depending on the type of contract or the specific terms, you may need a witness or notary public to verify the signatures. This is not always required but might be beneficial to do so. Lastly, each party should keep a copy of the signed contract for their records. This is important for reference and enforcement purposes.
  • Legal Review and Attention to State-Specific Requirements:  Consider having the contract reviewed by an attorney, especially for complex agreements or large transactions. They can ensure the contract complies with Pennsylvania laws and fully protects your interests. In addition, be aware of any Pennsylvania-specific legal requirements that may apply to your contract or business situation. Lastly, if updates or changes to the contract are needed, ensure they are made in writing and signed by all parties.


A well-worded contract can prevent disputes and provide a clear path for resolution if disagreements arise. It is an essential tool for protecting your business interests and maintaining good relationships with clients, suppliers, and partners. The law firm of Jones, Gregg, Creehan & Gerace has experienced business law attorneys who can help you with your contract needs and make sure that your business’s interests are protected every step of the way. Contact us today.