Like fitting up the parts of a jigsaw puzzle, lawyers normally prepare an agreement in a certain way. Quite often, you can find the following parts in a written contract:

1. PARTIES : this part contains the names and description of the persons entering into agreement. At the very least, you should get details of the address where that party or person can normally be found besides the name. People who pay great attention to details would also require some identification number such as identity card/ passport/business registration/company registration number. At worst, these details prevent confusion with another party who has the same name or a name that is quite similar. At times, it can provide you with a chance to check out if the other party is really who they say they are and avoid an outright scam! There is no good reason (not even for tax purposes) to conceal from a party with whom you are negotiating that a contract with you would probably be made with another party's name.

   A person who makes a contract must be old enough (in Singapore, being 21 years old is generally the minimum age, although 18 years would be acceptable in some cases, such as "contracts" to be married at the Singapore Marriage Registry. To be able to contract willingly and knowingly means that people who have difficulties understanding what is happening in the "real world", such as mental patients, retarded persons etc., will face suspicions over whether they "knew what they were getting into". This means most people drawing up a contract would want a contract which is signed by a company or by a person above 21 years old and does not have any history of mental illness.

Q: My 14-year old daughter just enteredinto a contract to purchase a hi-fi set. Is the contract valid?

The contract is invalid as your daughteris still a minor and therefore is not old enough to enter into alegally binding contract without parental consent except for“necessities”. The store will have to make a full refund whenshe returns the hi-fi set. Because of recent changes in the law,the store may be allowed to get back some minor expenses such asbanking charges (if your daughter used your credit card to orderthe hi-fi set from the store's Internet website).

2. RECITALS : these are statements about the background of the contract and are usually considered as merely informative. The recitals are examined by the courts only when intentions of the parties are being challenged. In some situations, the recitals may show that the parties had struck a deal while making the wrong assumptions all along.

3. TERMS OF CONTRACT : this is usually the part of the contract which receives the most attention. And rightly so. Carefully drafted contracts should set out:-

   • who is supposed to do what,
   • where it is supposed to be done,
   • when it should be completely carried out, and
   • how it should be done.

   Sometimes, the draftsmen also include terms to anticipate:-

   1. failure of the deal because of mistaken assumptions, wrong information;
   2. disastrous happenings like riots, earthquakes, etc., which happens through nobody's fault
   3. what would happen if any party breaches the contract
   4. things to be done if the contract should end earlier than expected because of (a) and/or (b) and/or (c).

   Any side who wants to propose or make any changes must do so before the contract is signed. Parties should normally be taken to have understood their part of the bargain, the rights and obligations that comes with it before signing. Once the contract is signed, it will be difficult for any party to say that he/she did not read the terms.

4. SCHEDULE : This is a document mentioned in the contract. It is considered as an integral and legally binding part of the contract. Normally, information of a technical nature, such as the parts of a machinery or manufacturing system, the exact geographical information of a property etc., is found here.

5. SIGNING BY PARTIES :The contract is not complete until it is signed by the parties or their representatives. In some cases, especially with private limited companies, a symbol is imprinted on a sticker pasted on the document in addition to the representative's signing. This process is known as "sealing".