Did you know that technically anyone can draft a contract—whether it’s for a business deal, a partnership, or any other agreement? This means that you’re not legally obligated to hire a lawyer when creating a business contract.
But just because you can draft your own contracts doesn’t necessarily mean you should. If you really have to, follow this guide to drafting a contract, making sure you include all the necessary elements of a contract to make it generally lawful, and that both parties are legally competent and consent to the agreement.
The necessary elements of a contracts
So, you’re about to draft your own business contract. It’s totally doable, but to make sure it’s enforceable and covers your bases, you need to include these key elements:
Offer
This is where it all begins. You’ve got to clearly lay out what you’re offering—whether it’s services, goods, or something else of value. This sets the stage for the entire agreement.
Read also: Write, review and analyze contracts with Oneflow AI
Acceptance
Once the offer is on the table, the other party has to accept it—plain and simple. Acceptance can happen through a signature or sometimes even through actions that show they agree to the terms.
Awareness
Both parties need to be fully aware that they’re entering into a binding agreement. This isn’t just about signing a piece of paper—it’s about making sure everyone understands and agrees to what’s being laid out.
Consideration
Every contract needs something of value to be exchanged. This could be money, services, or anything that both parties see as valuable. It’s what makes the contract more than just a promise.
Capacity
To make your contract legit, everyone involved needs to have the legal ability to agree to the terms. This usually means they’re of legal age and mentally capable of understanding what they’re signing.
Legality
Whatever you’re agreeing to has to be legal. You can’t enforce a contract that involves something illegal or goes against public policy.
How to use AI in contracts
Now you can write, review and analyze contracts 10x faster and at scale with our pre-trained AI packages.
Intention to create legal relations
Finally, both parties need to intend for the contract to have legal consequences. This might seem obvious in a business context, but it’s an important detail that ensures the contract is taken seriously.
By including these elements, you’ll create a contract that’s not just a handshake deal, but a solid, legally binding agreement. It’s still a good idea to have a lawyer take a look, but with these basics in place, you’re on the right track.
Read also: 5 best practices of AI in contract management
Using AI as your contract drafting partner
Now that you’ve got the basics down, let’s talk about how AI can make this whole contract drafting process a lot easier—especially if you’re not a lawyer. AI-powered tools are stepping in to take the guesswork out of drafting contracts by helping you draft and improve clauses, analyze and ensure all the necessary legal elements are covered, translate clauses from the language of your choice, and tailor the specifics to meet your needs.
Our latest release of the AI Assist tool does just that. Many users are already using it to suggest relevant clauses, flag potential issues, and even help with the wording to make sure everything is clear and enforceable. It’s like having a virtual legal assistant who’s always on hand to make sure your contracts are solid.
Benefits of using AI-powered tools to draft contracts
Even lawyers on the front lines are finding that AI is no longer just a futuristic concept but a vital tool in their day-to-day operations. AI-driven tools are changing how business contracts are created. These technologies streamline the drafting process, minimize mistakes, and significantly cut down the time required to produce thorough, accurate documents.
Which means that you’re not just saving time—you’re also reducing the risk of errors that humans might miss. Plus, it frees you up to focus on what really matters: running your business and making strategic decisions. So, while AI won’t replace a good lawyer, it’s a powerful tool to have in your corner when you need to draft a contract that holds up in the real world.
Read also: All you need to know about contract management
Examples of prompts to initiate business contract drafting with AI-powered tools
Here are some AI prompts you can try to craft a new contract that is tailored to your specific needs:
- Drafting an initial contract:
“Generate a business partnership contract between [Party A] and [Party B] based on the following terms: [list of key terms like payment, deliverables, timeline]. Ensure all legal elements, including offer, acceptance, consideration, and capacity, are addressed.” - Identifying potential issues:
“Analyze the following contract for any potential legal issues, including unclear clauses, missing terms, or risks of non-compliance. Provide recommendations for improvements.” - Suggesting relevant clauses:
“Recommend clauses for a non-disclosure agreement in a service contract between a marketing consultant and a client, focusing on confidentiality, scope of work, and data protection.” - Simplifying legal language:
“Rewrite the following contract section in plain English, ensuring clarity without altering the legal meaning.” - Ensuring compliance:
“Review this contract to ensure it complies with state and federal law regarding employment agreements. Highlight any areas that may require revision for legal compliance.” - Tailoring contracts to specific industries:
“Create a standard service agreement for a tech startup providing software development services, focusing on intellectual property rights, liability, and payment schedules.” - Adding dispute resolution clauses:
“Generate a dispute resolution clause for a business contract, detailing the process for mediation, arbitration, and jurisdiction for any legal disputes.”
Key takeaways
- A lawyer doesn’t have to draft a contract for it to be legally binding. Technically, anyone can draft a contract—whether it’s for a business deal, a partnership, or any other agreement. But just because you can draft your own contracts doesn’t necessarily mean you should.
- While it’s completely legal to create your own contracts, having a lawyer review them is a smart move. Why? Because a lawyer can ensure that your contracts are not only legally sound but also protect your interests in ways you might not have considered. It’s not just about legality; it’s about peace of mind. When you know that a professional has given your contract the green light, you can focus on your business with one less worry on your plate.
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Users can enter a custom prompt or select from the provided options. If satisfied with the generated content, they can instantly replace the highlighted text with just one click.
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