Trying to run a business without solid contracts leaves you vulnerable to the goodwill of others. When you create a written agreement, you reduce your risk by incentivizing them (and yourselves) to stick to what you agreed.
Yet many contracts have serious flaws that may only be discovered once a problem has arisen. By then, it is often too late to save the situation.
Here are some elements that you should consider in any contract your make:
Limitations
Define what the contract does and does not include. Making the exclusion explicit reduces the chance the other party can argue they thought it was included. For example, note how electrical goods manufacturers often mention exclusions to the warranty if you open the device or get it wet.
Limitations also refer to when the contract will end and any geographical limitations. For example, a landlord may state your commercial lease is only valid for one year, or a franchise may give you exclusivity, but only in your town.
How will you resolve problems?
Understanding the resolution process from the beginning can make it less likely that either side breaches the contract. If you leave working out how to do it until something does go wrong, the situation could be more tense due to what is at stake.
The signature of both parties
Adding a signature to say you have read the terms of the contract and agreement with them is crucial to lock it in. Otherwise, all you really have is a bit of paper with some suggestions about how you might work together.
Getting your business contracts wrong could be problematic, so consider legal help to get them right.