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Except for a sole proprietorship, enter your business entity's name and not a personal name as a party to the contract. Otherwise, Cohen adds, "you will be personally 'on the hook' and you have lost the limited liability that was likely one of your reasons for forming the entity in the first place. Never blur the distinction between you and the entity you own or represent."

Write a termination clause that explains the steps that one or both parties need to take in order to terminate the contract. For example, you may say that either party can terminate the agreement with a written 15-day prior notice to the other party. Also, include payment terms for any work completed to date that the customer is responsible for paying for this portion of the work. Write a dispute clause to establish the handling of a dispute between the two parties. For example, arbitration is one method the parties can agree to in the case where a dispute arises between them.

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