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In legal terms, a contract is any agreement between parties to exchange things of value, such as goods and services for cash. A simple handshake agreement is legally binding, but its terms are not always provable if a dispute arises. However, you don't necessarily need pages upon pages of legalese. A basic contract agreement often works best for a simple business transaction.

Sign and Date the Contract - "If an entity is a party to a contract, it is imperative that the signature block properly identifies the party signing on behalf of that entity," writes Michigan attorney Michael J. Hamblin in his website's article How to Properly Sign a Contract so It Will Be Enforceable. The signature block should name the entity, then under the signature, the name and title of the person signing, such as: Jones Plumbing, LLC By: John Jones Manager. Each signee should include the date next to the signature.

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