How to Write a Business Contract Proposal

Posted 17th July 2023

Contracts play a vital role in establishing agreements and ensuring that both parties involved understand their rights, responsibilities, and obligations. When it comes to proposing a business contract, it is crucial to have a well-structured and comprehensive proposal that clearly outlines the scope of work, deliverables, payment terms, and other essential details. In this blog post, we will guide you through the process of writing a business contract proposal, step by step.

1. Introduction and Background

Let’s start with the basics. Write a concise and engaging introduction that provides an overview of the proposed project and its objectives. Briefly explain the background of the project and why it is important for both parties involved. This section should capture the reader’s attention and set the stage for the rest of the proposal.

2. Scope of Work

Business Contract Scope of Work
The scope of work section is a crucial part of the contract proposal as it outlines the specific services or tasks that will be provided by the contractor. Clearly define the services or deliverables that will be provided, including any limitations or exclusions. Be specific and detailed in describing the services to avoid any ambiguity or misunderstandings. For example:

“The Contractor agrees to provide the following services to the Client:

  1. Market research: Gather and analyse data, prepare reports and presentations, and make recommendations for the Client’s business.
  2. Business plan development: Create a comprehensive and professional business plan, incorporating the results of the market research, and present it to the Client.
  3. Website design: Create a visually appealing and user-friendly website, incorporating the Client’s brand and aesthetic, and ensuring that it is optimised for search engines.”

 

3. Deliverables

In this section, outline the specific deliverables that will be provided to the client as part of the project. Each deliverable should be described in detail, including its description, format, length, and due date. Clearly define what the client can expect to receive upon completion of the project. For example:

Deliverable 1: Market Research Report – A comprehensive report analysing the market data, including key findings and recommendations. Format: PDF. Due Date: [Date].

Deliverable 2: Business Plan Document – A professional business plan document incorporating the results of the market research. Format: Word document. Due Date: [Date].

Deliverable 3: Website Design – A fully functional website design incorporating the client’s brand and aesthetic. Format: HTML/CSS files. Due Date: [Date].

And so on. Each deliverable should be described in detail and include specific specifications, such as format, length, and due date.

Delivery Schedule

The Contractor shall deliver each deliverable listed in the Deliverables section on or before the due date specified in the Agreement, or as otherwise agreed upon by the parties in writing. The Contractor shall notify the Client of any anticipated delays in delivery as soon as practicable.

Acceptance

The Client shall have [Number of Days] days after delivery of each deliverable to review and approve the deliverable, or to reject the deliverable and request revisions. Upon approval, the deliverable shall be deemed accepted by the Client.

Warranty

The Contractor represents and warrants that the deliverables provided under this Agreement shall be original and shall not infringe any patent, trademark, trade secret, copyright, or proprietary right of any third party. The Contractor shall indemnify and hold harmless the Client against any claims, costs, damages, and expenses, including but not limited to reasonable attorney’s fees, arising from any breach of this warranty. If the Contractor breaches this warranty, the Client shall have the right to terminate this Agreement, and the Contractor shall be responsible for any costs associated with reperforming the services or obtaining substitute services to replace the non-compliant deliverables.

4. Timeframe

Business Contract Timeframe
In the Timeframe section, you should specify that the services specified in the contract shall commence on (Start Date) and are expected to be carried out in a timely and efficient manner.

The completion date for all services is set for [End Date]. Both parties acknowledge that the specified timeframe is an important aspect of this agreement and agree to make all necessary efforts to ensure that the services are completed within this timeframe. Any delays in completion beyond the End Date may result in penalties or compensation, as outlined in the terms and conditions of this contract.

Time is of the Essence

Time is of the essence concerning the performance of the services by the Contractor and the completion of the services by the [End Date].

Delays

If the Contractor is delayed in the performance of the services for reasons beyond its control, such as acts of God, fire, strikes, lockouts, or other industrial disturbances, the [End Date] may be extended for a while equal to the duration of the delay.

Termination for Cause

If the Contractor breaches any material term or condition of this Agreement, the Client may terminate this Agreement by providing written notice to the Contractor.

Termination for Convenience

Either party may terminate this Agreement at any time by providing written notice to the other party. The Client shall pay the Contractor only for services performed and expenses incurred before the termination date.

5. Payment Terms

Business Contract Payment Terms
In this section, highlight how the client shall pay the Contractor the total amount of Amount for the services rendered under this Agreement. The payment schedule shall be as follows:

A down payment of [Percentage or Amount] shall be made upon execution of this Agreement.

[Percentage or Amount] shall be paid upon completion of each deliverable listed in the Deliverables section, as described in more detail below.

The remaining balance shall be paid upon completion of all services and delivery of all deliverables.

Payment Based on Deliverables

The Client shall make payments based on the completion of the deliverables listed in the Deliverables section. The Contractor shall notify the Client upon completion of each deliverable, and the Client shall have [Number of Days] days to review and approve the deliverable. Upon approval, the Client shall make the payment as described in the Payment Schedule section. If the Client disapproves of any deliverable, the Contractor shall revise the deliverable to the Client’s satisfaction.

Invoicing

The Contractor shall submit invoices to the Client at the end of each month, or as otherwise agreed upon by the parties in writing. The invoices shall include a detailed description of the services rendered and deliverables provided during the previous month, as well as the total amount due for such services and deliverables.

Late Payments

If the Client fails to make any payment due under this Agreement within [Number of Days] days of the due date, the Client shall be in default under this Agreement. In such event, the Contractor may, at its discretion, terminate this Agreement, and shall be entitled to receive all amounts due and owing, including but not limited to late fees, legal fees, and collection costs. The Client shall be responsible for all taxes, including but not limited to sales, use, and value-added taxes, arising from this Agreement, and shall pay such taxes directly to the applicable authorities. The Contractor shall not be responsible for any taxes arising from this Agreement.

6. Terms and Conditions

In this section, include important terms and conditions that govern the agreement between the client and the contractor. Cover topics such as the timeframe for the services, acceptance of deliverables, warranty, confidentiality, termination, dispute resolution, and any applicable governing laws. Be sure to address key aspects like the timeframe for completion, any penalties or compensation for delays, and the process for termination.

Time is of the Essence

Time is of the essence concerning the performance of the services by the Contractor and the completion of the services by the [End Date].

Delays

If the Contractor is delayed in the performance of the services for reasons beyond its control, such as acts of God, fire, strikes, lockouts, or other industrial disturbances, the [End Date] may be extended for some time equal to the duration of the delay.

Termination for Cause

If the Contractor breaches any material term or condition of this Agreement, the Client may terminate this Agreement by providing written notice to the Contractor.

Termination for Convenience

Either party may terminate this Agreement at any time by providing written notice to the other party. The Client shall pay the Contractor only for services performed and expenses incurred before the termination date.

7. Confidentiality

Business Contract Confidentiality
It is important to acknowledge the confidentiality clause, maintaining that the Contractor agrees to maintain the confidentiality of all proprietary and confidential information disclosed by the Client. For example:

The Contractor acknowledges that during performing services under this Agreement, the Contractor may receive or have access to confidential and proprietary information of the Client, including but not limited to trade secrets, business plans, customer lists, and any other confidential or proprietary information of the Client. The Contractor agrees to use reasonable care to protect the confidentiality of such information and shall not use such information for any purpose other than as necessary to perform services under this Agreement. The Contractor shall not disclose any confidential information to any third party without the prior written consent of the Client. The obligations under this section shall survive the termination of this Agreement and shall continue in full force and effect. If the Contractor is required by law to disclose any confidential information, the Contractor shall give the Client prompt notice of such requirement and shall cooperate with the Client in seeking a protective order or other appropriate remedy. If such protective order or other remedy is not obtained, the Contractor may disclose such confidential information to the extent required by law.

8. Termination

Always include that either party may terminate this agreement at any time upon written notice to the other party. In the event of termination, the Contractor shall immediately cease providing services and delivering any further deliverables under this Agreement. For example:

In the event of termination by the Client, the Client shall be responsible for payment for all services rendered and deliverables provided up to the date of termination, and any payment previously made by the Client for services not yet rendered or deliverables not yet provided shall be non-refundable. In the event of termination by the Contractor, the Contractor shall return to the Client all confidential information in the Contractor’s possession or control, including but not limited to any copies or summaries of such information. The termination of this Agreement shall not affect the rights and obligations of either party that have accrued before the date of termination and shall not relieve either party of any obligations under this Agreement, including but not limited to the confidentiality and payment obligations. The provisions of this Agreement that by their nature extend beyond the termination of this Agreement shall remain in full force and effect.

9. Entire Agreement

You will need an overview of the agreement in question, as the ‘Entire Agreement’ clause constitutes the entire agreement between the parties and supersedes all prior understandings or agreements, whether written or verbal, relating to the services and deliverables provided under this Agreement. This Agreement may not be amended except in writing signed by both parties.

No Reliance on Representations

The parties acknowledge that they have not relied on any representations, promises, or agreements, whether written or verbal, other than those outlined in this Agreement.

No Third-Party Beneficiaries

This Agreement shall not create any rights in favour of any third parties, except as otherwise provided in this Agreement. No waiver: The failure of either party to enforce any provision of this Agreement shall not be deemed a waiver of such provision or of the right to enforce such provision.

Severability

If any provision of this Agreement is held to be invalid or unenforceable, such provision shall be struck, and the remaining provisions shall be enforced.

Choice of Law

This Agreement shall be governed by and construed following the laws of the [State/Province or Country], without giving effect to any conflicts of laws principles.

Dispute Resolution

Any disputes arising under or in connection with this Agreement shall be resolved through arbitration following the [Name of Arbitration Association]. The arbitrator’s decision shall be final and binding on the parties and may be entered and enforced as a judgment in any court of competent jurisdiction.

Survival

The rights and obligations of the parties under this Agreement shall survive the termination or expiration of this Agreement.

10. Amendments

In this section, you must state that the Agreement may only be amended, modified, or supplemented in writing and signed by both parties. Any such amendment, modification, or supplement shall be deemed to be part of this Agreement and shall be binding upon both parties.

Any amendment, modification, or supplement made following this section shall be identified as such in writing and shall clearly state the effective date of such amendment, modification, or supplement. This Agreement may not be amended, modified, or supplemented by the conduct of the parties, course of performance, usage of trade, or any other method except as provided in this section. The parties acknowledge that they have not relied on any representations, promises, or agreements, whether written or verbal, other than those outlined in this Agreement. Any amendment, modification, or supplement made following this section shall not affect the validity or enforceability of the remaining provisions of this Agreement.

11. Governing Law

Business Contract Governing Law
Always highlight how your Agreement shall be governed by and construed following the laws of the [Governing Law], without giving effect to any conflicts of laws principles. Follow the stages below:

Choice of Forum

The parties agree that any legal action arising out of or in connection with this Agreement shall be brought in the courts of [Governing Law], and each party consents to the jurisdiction of such courts.

Venue

The parties agree that the exclusive venue for any legal action arising out of or in connection with this Agreement shall be in [City/County/State], [Governing Law].

Applicable Law

The parties agree that this Agreement shall be interpreted following the laws of [Governing Law] and that any dispute arising under or in connection with this Agreement shall be governed by the laws of [Governing Law].

Waiver of Jury Trial

The parties hereby knowingly, voluntarily, and intentionally waive any right to a trial by jury in any action arising out of or in connection with this Agreement.

No Waiver of Sovereign Immunity

Nothing in this Agreement shall be deemed to waive any sovereign immunity of either party.

Survival

The governing law provisions of this Agreement shall survive the termination or expiration of this Agreement.

In conclusion, mastering the art of crafting a business contract proposal is a pivotal step towards success in the competitive business world. Through this blog post, we have navigated the intricate pathways of creating a persuasive and compelling document that not only captures the attention of potential clients but also seals the deal.

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