How to Write a Legal Contract (5 Essential Elements)

“We don’t need a contract, we trust each other.” That is the famous last word before a lawsuit. You don’t need a $500/hour lawyer to write a contract. You just need to include these 5 specific sentences to turn a handshake into a binding agreement.

BMT Legal Research Team BMT Legal Research Team · 📅 Jan 2026 · ⏱️ 5 min read · LEGAL › CONTRACTS
Format
Written
Emails CountFact
Core Rule
Quid Pro Quo
“This for That”Def
DIY?
Yes
For Simple DealsEasy

The 3 Pillars of a Valid Contract

Legally, a contract is like a three-legged stool. If one leg is missing, it falls over in court.

Component Meaning Example
1. Offer The Proposal “I will paint your house.”
2. Acceptance The Agreement “Okay, I agree.”
3. Consideration The Exchange “For $500.”
What is “Consideration”?
This is the lawyer word for “Value.” Both sides must lose something to gain something.
“I will paint your house for free” is NOT a contract. It’s a promise. You can’t sue someone for breaking a free promise.
Bad vs. Good Contract
Vague Contract Risky
“I will do marketing.”
Specific Contract Safe
“3 Posts/Week for $1k.”
Napkin Contract Valid
If signed, it counts.

The 5 Things You Must Write Down

Don’t use fancy templates yet. Just make sure these 5 points are clear.

1. The Parties (Who?)

Use legal names. Not “Bob,” but “Robert Smith.” If you have an LLC, use the LLC name (e.g., “Bob’s Burgers LLC”) to protect your personal assets.

2. The Scope of Work (What?)

Be specific.
Bad: “Fix the bathroom.”
Good: “Install new sink, tile the floor, and paint walls white.”
This prevents “Scope Creep” (doing extra work for free).

3. Payment Terms (How Much?)

When do you get paid?
“50% Deposit upfront, 50% upon completion.”
Specify the deadline: “Payment due within 30 days of invoice.”

4. Timeline (When?)

“Work starts on Jan 1st and ends on Jan 31st.”
If there is no deadline, the other person can take 10 years to finish, and you can’t sue them.

5. Termination (The “Kill Switch”)

How do we break up?
“Either party may cancel this contract with 7 days written notice.”
Without this, you are married to them until the job is done, even if they are terrible.

Pro Tip: Signatures & E-Sign

It’s 2026. You don’t need a fax machine.

The ESIGN Act

Electronic signatures (DocuSign, HelloSign, or even typing your name in an email saying “I agree”) are 100% legally binding.
Warning: A text message saying “Sure!” can be considered a signature in court. Be careful what you text.

Frequently Asked Questions

Are verbal contracts legal?
Technically Yes, Practically No. If you say it, it’s a contract. But good luck proving it in court. It becomes “He said, She said.” Always get it in writing (text/email counts).
What if I forget a clause?
The court will use “Common Law” or “UCC” (Uniform Commercial Code) to fill in the blanks. But the court’s default rules might not be what you want. It’s better to write your own rules.