A contract is simply an agreement. Contracts may be oral or written, formal or informal. However, to be official and binding, a contract must fulfill certain requirements, as determined by state law. Contract laws vary from one state to the next, but most states follow the same general guidelines with respect to these legally binding agreements.
Review your state's laws to determine the requirements for a legally binding contract. Normally, a contract requires two parties, mutual consent, object and consideration. To access your state's laws, consult the title or chapter on contracts in the state code.
Draft a contract from a blank document or use a template (see Resources for sample contracts). Alternatively, draft the contract by hand. Identify each party by full name. Ensure that each party is of sound mind and of age (18 years, in most states). Describe the parties, if applicable. For instance, designate "the seller" and "the buyer."
Identify the object, which is the agreement to which parties have come. Ensure that the object is legal and lawful. Also, identify the consideration, which is the compensation or exchange for the object. The consideration is often, but not necessarily, monetary. For example, state "Party A hereby engages Party B to provide services described herein in exchange for (consideration or amount in dollars)." For a sale contract, write a provision to the effect of "Party A hereby conveys to Party B full ownership and title to property described below in exchange for (consideration)."
Indicate the provisions, if any, of the contract. For instance, if the contract is a residential lease agreement, set for the terms of the lease, including the tenant's and the landlord's rights and responsibilities. Also, indicate the date upon which the contract expires, if applicable.
Have each party sign the contract freely and consensually to validate the contract. Ideally, sign the contract in the presence of a notary public commissioned by the state in which the contract is executed.