How to Understand the Language of Contracts


Contracts are everywhere. They’re the terms and conditions that people skip when they download mobile applications or install new software. They’re the long block of text your employer gives at the start of your job, outlining expectations and benefits. It’s tempting to skip over the boring terms or legalese, but not understanding what you agree to can lead to unsavory circumstances. That is especially true if you’re working in the corporate world, where contracts are the norm when there are new ventures and agreements. You need contracts to purchase equipment, from simple ones like window cleaning rags to pricier assets like computers and printers. Every employee should know how to make sense of legalese if they want to have a successful career down the line.

The art of translation and patience

Legal professionals make it their life’s work to decipher and write legalese. They comb through contracts with an eye for detail and never-ending patience because they know how dangerous negligence can be. Seemingly innocent statements and unspoken agreements can lead to headaches down the road. A contract can protect those involved as it outlines the obligations and consequences of a relationship. They provide clarity and accountability so that there will be trust in the work.

Employees, too, need the discerning attitude of lawyers when it comes to contracts. Or at least, know how to ask for help from the legal experts. Disputes can happen when no written document guides the partnership as a battle of he-says-she-says will ensue. It is also vital for contracts to include dispute resolution clauses so that the way forward can be apparent in times of disagreements. You can think of contracts as an exercise in risk management. Lawyers will have identified risks and scenarios and include them in the contract.

The bare necessities

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Individuals looking to get a better understanding of contracts can learn about the essential parts of the document. Whether you’re sealing the deal in renting an apartment or getting a pet from the local shelter, the contracts will most likely follow the same structure. Additional parts are only seen in more complicated scenarios where one will need professional help. Here are the bare necessities:

  • Purpose and Scope — This part outlines the reason why the contract exists. What outcome are both parties expecting with the agreement? The purpose and scope should be detailed and accurate.
  • Involved parties — A contract won’t exist if there are no people behind it. This part shows those bound by it, with details such as the name and addresses included at the beginning.
  • Responsibilities — This is the meat of the contract where the roles of the people involved are written down. Reading through the responsibilities portion can help individuals know the expectations that they should fulfill.
  • Termination — It’s always possible that contracts will be deemed null and void by one or both parties. Having an exit strategy can help people get out of an agreement that is no longer favorable or profitable. This part also explains what people shouldn’t do to make the contract invalid.

No matter what one feels about legalese, contracts are here to stay. It’s better to stop whining and practice due diligence to avoid trouble and problems in one’s work.

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