Contract Drafting Checklist for Small Businesses

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Avoid Costly Mistakes With a Solid Contract Checklist

Contracts are the legal backbone of your business, but drafting them wrong can cost you thousands.

Most legal disputes don’t happen because of bad intentions; they happen because of vague language, missing terms, or unenforceable agreements.

This checklist is designed to help small business owners and startup founders confidently draft legally binding, enforceable contracts.

Print it. Bookmark it. Use it every time you draft or sign an agreement.

Who Should Use This Checklist?

• Freelancers working with clients

• Small businesses hiring contractors or employees

• Startup founders drafting partnership or equity agreements

• E-commerce owners writing service or vendor terms

• Anyone entering a business deal involving money, deliverables, or legal liability

Pre-Contract Planning: Ask These Questions First

Before you even start writing the contract, get clarity on:

• What exactly are you exchanging? (Product, service, money, IP?)

• What’s the timeline and payment structure?

• What are the deal-breakers or liabilities?

• What happens if one side wants to cancel or fails to perform?

If both parties can’t clearly answer those questions, the deal is not ready for a contract.

The Ultimate Contract Drafting Checklist (Use This Table)

✅ Item	What to Include	Why It Matters
1. Title of Agreement	“Independent Contractor Agreement”, “Partnership Agreement”, etc.	Establishes the purpose & context
2. Date	Effective date of the contract	Important for enforcement and timelines
3. Legal Names of Parties	Full legal names + addresses of all individuals/entities involved	Avoids confusion in court or enforcement
4. Scope of Work / Services	Clear description of what’s being provided/delivered	Most litigated clause — be specific
5. Payment Terms	Amount, method, frequency, deadlines, late fees	Prevents disputes and non-payment
6. Timeline / Delivery Dates	Start, end, and key milestones	Holds both sides accountable
7. Termination Clause	Conditions under which the contract can be ended early	Protects you if the relationship sours
8. Confidentiality / NDA	Optional — protects sensitive business info	Critical for IP and trade secrets
9. Dispute Resolution	Mediation, arbitration, or jurisdiction clauses	Saves you from costly lawsuits
10. Signatures & Dates	Both parties must sign — physical or e-signatures	Required for enforceability under U.S. law

🚩 Contract Red Flags to Avoid

Avoid these mistakes that often invalidate or weaken contracts:

🚩 Using free templates without edits

🚩 Leaving out specific deadlines

🚩 Ambiguous language like “reasonable efforts”

🚩 Forgetting termination conditions

🚩 No clause on how disputes will be resolved

🚩 Relying on verbal modifications post-signing

A contract is only as strong as its weakest clause.

📞 When to Call a Lawyer

Use this checklist first, then consult an attorney if:

• The deal is high-value ($10,000+)

• You’re dealing with international parties

• It involves employees or intellectual property

• You’re unsure of your rights or risks

• You’re being asked to sign someone else’s contract

FAQs

1. Do contracts need to be notarized to be enforceable?

No a valid contract only needs mutual agreement, legal purpose, and signatures. But notarization may help in disputes.

2. Are email or PDF contracts valid?

Yes under the E-SIGN Act and UETA, digital signatures and emailed agreements are fully enforceable.

3. Can I change a contract after it's signed?

Yes, but both parties must agree in writing. Always document the amendment formally.

4. Is a contract valid without a termination clause?

Yes, but not having one makes early exits riskier and can lead to legal disputes.

5. What if the other party doesn’t fulfill their end?

If the contract is well-written, you may have legal grounds to sue or recover damages. A lawyer can help you assess options.

Use This Checklist to Safeguard Every Business Deal

Writing solid contracts isn’t just a legal formality it’s a core business skill. Using this checklist helps ensure your agreements are:

✅ Clear

✅ Complete

✅ Enforceable

✅ Fair

It’s the easiest way to prevent costly legal issues later.

📥 Downloadable Resource:

📝 Click here to download the PDF version of this Contract Drafting Checklist 

Suggested Internal Links

• How to Draft Legally Binding Contracts for Small Businesses

• Why Every Business Needs a Litigation Attorney

• What Makes a Contract Enforceable in Your State?

Disclaimer

This article is provided for educational purposes only and does not constitute legal advice. Contract laws can vary based on your specific circumstances, industry, and jurisdiction. Reading this content does not create an attorney-client relationship with The Spencer Law Firm. If you are a business owner in Houston or elsewhere in Texas, you should consult a licensed attorney before drafting, signing, or enforcing any contract. Past results or examples do not guarantee future outcomes.