Lesson Five
Contract English
合同英语

Part I Objectives

Part II The How-Tos

What You Should Know About a Contract

² Why Do I Need A Contract? 为什么需要合同?
You don’t have to be a lawyer to reap the benefits of writing your own contracts. A little common sense goes a long way and a good contract does more that just cover your rear should you end up in court. Written correctly, a contract can demonstrate business professionalism, weed out insincere clients, organize your duties, speed up your pay, help you get insurance, avoid disputes, make mutual obligations clear and keep you out of court.

² What is a Contract? 什么是合同?
A contract is a legally binding agreement. Contracts are either formal (written) or simple (verbal). It may be a bilateral contract, performed by both parties, or unilateral, a promise in exchange for an act or performance of a task or deed. Contracts may be voided, that is, the parties may agree to nullify the contract or it may be voided by a court of law. These are some of the characteristics of a contract.

² Elements of a Good Contract 合同的要素
Every good contract has four essential component parts. They are: offer and acceptance, mutuality and consideration, competent parties, and a legal object.
An offer is communicated verbally or in writing and has definite terms. Mutuality indicates duties or actions are performed by each party. Consideration means that something of value is exchanged. Competent parties speak to the mental and legal capacity of the parties involved in making the contract. A legal object connotes a legal objective and no criminal intent.
Contracts don’t have to be formal: a letter of agreement is a contract too. In fact, a contract can be anything — it can be oral, can be written on a napkin(though not advised), can be a purchase order or a combination of documents exchanged between parties. It has no particular form. Written is better, though, then the terms are less often questioned.
To construct your own contract, specify the issues and conditions that matter. Independent consultants, for example struggle with Internal Revenue Service rules that threaten to reclassify them as employees. In an independent contractors contract state “the contractor is an independent contractor and not an employee.” That will protect the business identity and relieve your client of the fear that they will end up having to pay your health insurance premiums and Social Security taxes.
Include specific services your are to perform and deadlines. Detail a payment schedule that is suitable to both parties. If intellectual property (i.e., software, reports, manuals) is involved, include details about who owns the rights and the extent of those rights. If your work is project-based, include a description of when the job will end. That can be the delivery of the final report, etc.
So, how do you write your own contract? It is easier than it may appear. Several software packages exist to help you with the chore. Look also for printed forms. However, they are not as easily customized to your needs as software packages.
Get a good set of forms, fill them in and spend less on lawyers. Your understanding of the principles of contracts, their uses and limitations are sure ways to cut legal bills or avoid them altogether. It will also prevent murky situations in which inexperienced professionals find themselves and to avoid litigation.