How To Write An Agreement Between Two Parties?

Introduction 

An agreement between two parties is an essential requirement for the business world. Whether such an agreement is made in written or oral form, it holds the rights and responsibilities of the parties. Typically, in the terms of the agreement, one party expects to do something for the other party’s benefit, and that party receives compensation. If, both parties agree on the same thing they enter into a legally valid contract. That contract can be enforced by either party in a court of law, in the event of breach.  In this way, writing an agreement between two parties is an essential part of the contract. In this article, we explore, what is an agreement, how to write an agreement between two parties, and what you need to include to write an agreement between two parties. So stay tuned and read below:

What is an agreement?

Before we enter an in-depth concept of how to write an agreement between two parties, firstly we have to know what an agreement is. An agreement is a contract between two or more parties, it refers to a legally binding, when they agree upon the terms and conditions of the same thing and put their sign on it. An agreement can be made in any mode such as written or oral. But, if the parties agree to enter into an agreement, the written agreement provides more security to protect the right in the event of breaches of an agreement.  

What should you need to include in an agreement between two parties?

Some clauses you should include in drafting an effective agreement between the parties. These are given below:

Identify the parties

In this section, you should mention the full name, address, and contact details of the parties, it helps to make a legally enforceable contract. You also need to include other details such as, 

• If one or both parties enter into the contract as a business organization, corporation, or limited liability company, the party signs the agreement on behalf of the company. 
•  If the party signs and enters into the contract on behalf of the business entity, in that case, include their position or title as a representative.
• If the party enters into the contract on behalf of the partnership firm, they should include the details of the firm’s business and its designation.

Define the role of the parties in the agreement

Defining the role of each contracting party in an upfront agreement is necessary. Because after that you can continue to refer those parties by their role. Written agreement becomes an important part of a personal or business life. That’s why, you should carefully write the agreement between two parties.

Purpose of an agreement

The purpose of an agreement is the base of a contract. After identifying the parties in the agreement, you should describe the terms and conditions such as,

• Include the main purpose on that base the contracting parties come together. 
• Specify the date when the agreement comes into effect.
• Mention the clause that based on either party can terminate the agreement.
• Include the end date of the contract.
• Specify the duties and obligations of the party. In a contract, each party has specific duties and obligations to perform.   
• Include additional expenses or other conditions, such as in which circumstances, the parties can escape from performance. You should specify what type of expense the parties are responsible for.    
• Mention other considerations details if the parties agree upon. Such as legal charges, property rights, and insurance policy details. etc. 

Clause for breach of agreement

In this clause, you should describe the terms of breach, when writing an agreement between two parties. If the contract is breached by the party or fails to perform, that can be counted as a breach of contract. Such as,

• Describe what kind of remedies are available in the case of breach of contract by either party. 
• Mention the exceptions clause, in which situations the braches can count as understandable, like any event that is out of the control to perform their obligations. 
• Mentions what kind of remedies for breach of contract, if the issue arises between the parties.
• Mentions what types of damages can be sued by an aggrieved party. The litigation charges include the damages and the breaching party pay.
• Specify which state laws and jurisdiction will apply in the event of a breach of contract. 

Finalizing of agreement

Once included above clause in a draft copy of the agreement, the contracting parties must carefully read each clause. Make ensure all terms and conditions of the contract are understandable to them in the same. Such as, 

• If the party is confused about understanding or disagrees with any clause. They can resolve the issue before signing the contract. 
• Hire an attorney to review the agreement, they can help to make it in legal terms, comply with applicable law, and be legally enforceable. 
• Both parties must sign the agreement to make a legally binding contract. 
• Once parties are signed the agreement becomes a legally valid agreement which is effective on the signing date.
• It is advisable to register an agreement from the notary public. The registered agreement gives more effectiveness in the law. However, there is no legal requirement for the registration of an agreement, unregistered agreement is also valid.
• The parties should have a copy of the agreement for the record purpose. 

What are the benefits of a written agreement?

An agreement is a legal document that sets up the terms and conditions between the parties involved. The agreement is made between two or more parties. Having an agreement is beneficial for them. In the written agreement the parties can be aware of their rights and responsibilities. It also has some benefits such as,

• It protects the legal rights of the party.
• An agreement outlines the duties and responsibilities of the party. That helps to avoid misunderstandings between them. 
• A written agreement creates more trust and coordination between the parties.
• The parties can easily resolve disputes without approaching the court which saves time, money, and energy. It provides a proper mechanism to resolve disputes through mediation or negotiation.

How do the parties understand the terms of the agreement?

The contracting parties must have agreed and understand, each of the terms of the agreement before entering into the contract. If there is any confusion they can negotiate or take the help of an attorney. Once the parties are satisfied and clearly understand an agreement they sign and date.  

Conclusion 

An agreement protects the parties’ rights and clarifies the duties and liabilities. A written agreement between two parties provides more safety, stability, and surety. It helps to achieve goals on that base, they come together and enter into the agreement. The agreement between two parties should be written carefully and include all aspects. You have to include important details while drafting an agreement like the parties’ names, aims of an agreement, terms and conditions, remedies in the event of breaches, financial damages and penalties, etc. In short, we can say that a contract between two parties protects their right, and interests and creates a healthy and wealthy relationship between them.