44+ Sample Model Contracts

What Is a Model Contract?

People get into agreements every day when they buy products, and when they do business. A contract is a written agreement involving two or more individuals. Individuals, companies, or independent contractors use contracts to carry out a duty in return for something valuable. Model contracts are example contracts. It can be a model contract of employment, service, work, performance, and more. Agreements can come in different forms, but they have one purpose: to protect the parties involved through the governing laws and for both parties to fulfill their responsibilities and promises. If issues arise later on after the signing of a contract, the parties can bring the case to court, and the court will make final decisions regarding the matter.

The United States Census Bureau estimates that there will be 7.89 billion people on the planet this July 11, 2020.

Out of that population, there are more than 5.89 million small business owners in the United States.

Moreover, according to Statista, there are over 130.6 million full-time employees in the U.S.

When entering into a contract, the parties must understand all the terms in it. So, here are commonly used clauses in standard model contracts.

Assignment. In a contract, one party may assign its privileges to an outside party, but both parties cannot transfer their obligations to other parties. Therefore, one party can enter into a contract without knowing that a third party is involved. That applies to service contracts. For example, a makeup artist agrees to provide services for specific hours without knowing all the people involved.Boilerplate. Boilerplate are provisions standard in most contracts. It serves to regulate the operations of a deal. Examples of boilerplate provisions include indemnification clauses, governing law clauses, jurisdiction clauses, etc.Confidentiality. Confidentiality clauses are essential to keep confidential information private. That is crucial, especially when one party reveals its secrets to the other. Confidential information covers and includes trade secrets, clientele lists, names of suppliers, or any business information that a company regards highly valuable. Confidentiality clauses will protect private information from being disclosed to potential competitors.Dispute resolution. During the initial phase of the contract arrangement, parties usually overlook provisions concerning dispute resolution. The agreement often focuses on the conditions for payment, the scope of work, the products offered, etc. Nevertheless, a contract needs to have statements concerning disputes because they are possible to arise later on. Provisions for such situations will help all parties know and understand the procedures to follow in case problems occur. A letter of notice is usually sent to the violating party, allowing that party to correct the mistakes. If the violator doesn’t comply with the notice, the parties can resolve the issue through an arbitrator or a court.Entire agreement. It is common to see the following statements as part of the contract: “This contract comprises the entire agreement of the parties involved regarding the particular subject. It replaces all past agreements between the participants, and all parties acknowledge that this agreement doesn’t rely on previous promises, representations, warranties, or provisions unless expressed in this contract”. The purpose of the clause is to ensure that all parties have captured every term in the agreement. This clause is a boilerplate provision that causes litigation. Thus, the statement is vital since it stipulates that the contract contains the entire agreement, and any previous negotiations, statements, or representations are irrelevant unless it is part of the contract.Force Majeure. A force majeure provision excuses the parties involved from attending to their obligations under the contract in case an uncontrolled event happens. The clause provides a timeline for the parties in case the event continues. If the event goes beyond the timeline, the contract automatically terminates both parties from their obligations. Examples of such events include explosions, fire, riots, strikes, volcanic explosions, and terrorist activities.Indemnity. An indemnity clause serves as insurance for damages, or it can also serve as immunity from liability. It is an arrangement where one party consents to compensate for the damages or losses caused by the other. One contract form example is an insurance contract. The indemnitor agrees to own the payment of another for any losses in exchange for premium payments. There is what we call an indemnity period and an indemnity letter. The former refers to the specific time payment remains valid, while the latter guarantees that the parties involved in a contract must meet all their obligations unless they want to pay for indemnity.Jurisdiction. The term jurisdiction refers to the power of a court to exercise its authority over people within a specific area. It can also refer to a particular region where politicians have control. There are three types of jurisdiction: jurisdiction over an individual, jurisdiction over a subject, or jurisdiction to address a sought judgment.Liquidated damages.  This clause sets a fixed amount of money that both parties agree to in case of a breach. If the court sees the amount to be too much, the liquidated damages clause will be disregarded. Therefore, both parties must agree to a figure that is reasonable enough.Termination. A termination clause applies to almost all contracts such as an employment contract, a freelance contract, a professional service contract, and more. A termination clause sets the procedures for contract cancellation if one party decides to end it or if one party breaches the agreement. It may also demand compensation for loss or damages incurred to the other party. Most often, you can see a termination clause in an employment contract. For example, an employment contract defines the worker’s rights of getting a notice before termination, or severance pay. A severance pay refers to the benefits or compensation an employer gives to an employee after termination. The pay applies to employees who retire, who are eliminated, or laid off. Some workers who resign may also get severance pay.

How To Write a Valid Model Contract

Whatever type of model contract you want to create, whether it be a sales contract, a management contract, or any business contract, you must ensure that it is valid. So, here are the steps to make an agreement valid.

Step 1: Put Your Agreement in Writing

Although most oral agreements can be legally binding, they are difficult to impose in court. In the business industry, arrangements must be put in writing. A written contract can serve as proof of your agreement with another if conflicts arise in the future. Moreover, when writing a deal, it doesn’t have to be complicated for it to be valid. So, make your agreement simple, clear, concise, and direct to the point.

Step 2: Identify the Parties Involved

Make sure that the names you write in the contract are the parties’ correct and legal names. The purpose is to be clear about who is under obligation to perform the duties under the contract. For example, in a standard business contract, a company that is structured as a corporation or an LLC should include an LLC or Inc. suffix in its name.

Step 3: Write all the details

The content of the contract must lay out the exclusive rights and responsibilities of both parties. Input all your verbal agreements in writing and in detail to make it enforceable. Also, include an amendment clause in case you fail to include all details.

Step 4: Include the Payment Obligations

Include a statement in the contract that specifies who has the right to receive payment and what the conditions are for payment. Most often, money is the cause of issues arising between parties. So, it is crucial to make this part of the contract plain. Write statements concerning the method, the terms, and the requirements for payment.

Step 5: Incorporate a Dispute Resolution Clause

Decide on how you will take care of disputes that may arise later on. It can be through arbitration or the court. Also, don’t forget to choose a law that will govern your contract. If you live in a different state, you can opt to choose one law from your state.

Step 6: Don’t Forget the Termination Clause

All contracts must have a termination clause, where both parties have the right to cancel the agreement in case of default. For example, if one fails to meet deadlines, the other can terminate the agreement anytime due to contract violation. As mentioned, termination can also apply when a company lays off employees or if an employee retires.


Is a modeling contract the same as a model contract?

Not necessarily, but a model contract can also refer to a modeling contract. A modeling contract is an arrangement between an agency and a model who agrees to offer services in return for a fee. The model here works as a freelancer or an independent contractor. A modeling agreement may contain the following information: payment conditions and terms, contract length, exclusive rights of the agency, statements concerning tax, etc.

What are the critical components of an enforceable contract?

For a contract to be enforceable, it must comprise the following key components: (1) Mutual assent. Both parties must understand what the agreement is all about. (2) Proposal and confirmation. One party should propose by stating its intentions, while the counterparty confirms or accepts the offer. (3) Consideration. Both parties must agree to exchange something valuable to make the contract binding. (4) Capacity. All parties must be capable of entering into a legal agreement. (5) Legal purpose. Contracts should only be used for legal reasons.

Typically, an individual must be of the right age to enter an agreement. In several states, a person should be 18 years old or more. Aside from a person’s legal capacity to engage in a contract, he/she must also have competency. Competency is a person’s ability to know or understand the contract’s nature. Therefore, an individual must have both legal capacity and competency to enter into a legal agreement.

Contracts play a significant role in all the agreements a worker, a freelancer, or a company makes with another entity. It protects an employee’s rights, ensures a freelancer’s payment, or safeguards a company’s trade secrets. You can click and download one of our example or model contracts above for your reference.