Provide sufficient review time

Allow each party ample time to review the agreement. This will reduce the likelihood of a claim that a party did not understand any terms or how those might affect the agreement.

Sign the agreement before everything

A contract should be signed before any services are performed, goods are exchanged, or money is transferred.

Keep copies of the general agreement

Sign two copies of the agreement, one for you and one for the other party. Keep a copy of the signed agreement for your records. At the end of its term, you and the other party can revisit its provisions and consider whether to renew.

Involve a witness or notary

Depending on the nature of its terms, you may decide to have your agreement witnessed or notarized. This will limit later challenges to the validity of a party’s signature.

Make it comprehensive

Both parties should review the completed agreement carefully to ensure that all relevant deal points have been included. It is better to be over-inclusive than under-inclusive. Do not assume that certain expectations or terms are agreed to if they are not stated expressly in the document.

In case you have doubts, you can always resort to using an online template as your base to create your general agreements. You can also use LegalZoom's template for free and create your agreement by filling out the required details.

Engage a legal counsel

If your agreement is complicated, you can always seek the counsel of an attorney to help you draft a document that will meet your specific needs.

Understanding the important clauses of a general agreement

The following instructions will help you understand the terms of your agreement.

Introduction

In the first section, you need to provide the details of the parties involved in the agreement. Start by providing their name, the nature of the business or company's name, the state where the company operates, and the designation of the people to whom this agreement is addressed. For instance, if it is for a distributor, address their name and the designation.

First party's obligations

In most agreements, each party is expected to do something. This obligation may be to perform a service, transfer property ownership, or pay money. Add information regarding the first party like:

• their name
• duties and responsibilities they will handle
• time period

Second party’s obligations

Here, you need to add relevant details about the second party and describe their duties.

Representations of the parties

A representation is a statement of fact by one or both parties. Representations are used in contracts to reflect the parties understanding of the status quo and, in some cases, for one party to persuade the other party to enter into the agreement.

For example, if one party sells equipment, the other party may want the seller to state that the item meets certain quality standards. If one party is performing a service, that party may assert that it is fully licensed and insured.

Additional terms

In this segment, include any additional terms not already listed. For example, if the parties will exchange confidential information, you may want to include a provision about protecting that information.

Force majeure

This clause releases a party from its obligations if its performance is made impossible by an event beyond its control. For example, if a flood makes it impossible for the first party to get to the second party’s office, the first party won’t be in breach of the agreement.

If a force majeure event makes it impossible for one party to do something, that party facing those problems must inform the other party and take reasonable steps to resolve the issues (if possible).

Note: This release is effective only if circumstances continue to prevent that party’s completion of its tasks. In other words, once the flood is over and the first party can get to the second party’s office, the “force majeure” excuse can no longer be used.

Governing law

(a) Choice of law: This lets the parties choose the state law that will be used to interpret the agreement. This is usually a state where one or both parties live or do business.

Note: There should be some connection between your chosen state and the parties or their businesses. A court may be reluctant to uphold a choice-of-law provision that is random or chosen to avoid a disadvantageous law.

(b) Choice of forum: The forum is the location where the parties’ disputes will be resolved. You need to provide the state and county where you or the other party can file a lawsuit.

Note: This section is written so the parties can bring suit in the county and state listed but are not required to. The parties have agreed to the forum, so it may be easier for a party to sue there, but they can still choose a different location. As with the choice of law, the forum choice should be reasonable and have some connection to the parties or their businesses.

(c) Attorneys’ fees: In many states, if an agreement does not say anything about attorneys’ fees, it is assumed that each party will pay their own attorneys’ fees if they end up in court. There are exceptions to this rule for specific types of cases (like class actions and civil rights violations), but this is true of most cases in the United States. It also states that if the parties have to take legal action to resolve disagreements, the losing party will pay the winning party’s attorney’s fees. This helps people with valid claims who cannot afford to pay an attorney to litigate on their behalf.

Amendments

An amendment is a change to the terms of the agreement. It states that the only way either party can change any terms is if that change is both (a) in writing and (b) signed by both parties. Without this provision, a party could argue that a conversation between the parties was an “oral amendment” of the document or that unsigned emails also changed its terms.

Assignment and delegation

An “assignment” is the transfer of rights from one person or party to another. A “delegation” is the transfer of obligations from one person or party to another. A contract's “assignment and delegation” section explains which parties can or can’t assign and delegate their rights and obligations. Neither party can assign or delegate the agreement terms unless the other party gives written consent before that assignment or delegation takes place.

A party can’t unreasonably refuse to give its consent to an assignment or delegation. This prohibits one party from acting irrationally to restrict the other party’s rights.

Note: If either party tries to assign or delegate without getting the other party’s permission, that assignment or delegation will be void: in other words, there will be no assignment or delegation, and the rights and obligations of the parties will be the same as they were before.

Counterparts; electronic signatures

This section explains that even if the parties sign the agreement in different locations, or use electronic devices to transmit signatures (like fax machines or computers), all of the separate pieces will be considered part of the same agreement.

In a modern world where signing parties are often not in the same city - much less the same room - this provision ensures that business can be transacted efficiently without making the agreement invalid.

Severability 

Severability protects the terms of the agreement as a whole, even if one part is later invalidated. For example, if a state law prohibits faxed copies of signature pages, it will not undo the entire agreement. Instead, only the references to faxed copies of signature pages would be deleted, leaving the rest of the agreement unchanged.

However, if an essential part of the agreement is invalidated, the agreement may terminate. For example, if a law is passed stating that the arrangement into which the parties are entering is illegal, the purpose of the agreement is lost. In such cases, the agreement will probably be invalidated.

Notices

It lists the addresses to which all official or legal correspondence relating to the agreement should be sent. You need to write in a mailing address and contact information for both parties. You can include a person’s name or a reference to a position at your company (for example, General Counsel). This will keep you from having to amend your agreement whenever someone changes jobs.

Waiver

A “waiver” occurs when one party does something that gives up the right that they have. This can take written form or can be some kind of action. For example, say the parties include a provision that the first party must pay the second party within 10 days after receiving an invoice. If the first party doesn’t do this and the second party doesn’t insist on it, the second party is said to have “waived” its right to require this deadline.

Note: The parties can only waive rights in writing. This means that in the example just provided, the second party has not waived its rights. It did not make a written waiver– the waiver was the action that the second party took. If the parties want to change time limits, they will need to create a written, signed waiver or amend the agreement.

Entire agreement

The parties’ agreement that the document they’re signing is “the agreement” about the issues involved. For example, if the parties had exchanged letters that contradicted provisions in the agreement, those documents wouldn’t be considered part of the agreement. Unfortunately, the inclusion of this provision will not prevent someone from arguing that there are other agreements and promises that should be considered part of the agreement, but it will provide you some protection from these claims.

Note: The headings present in the general agreement at the beginning of each section and subsection are provided to organize the document. These labels are meant to help as you’re skimming the document or searching for a specific section. However, these headings are not part of the substance of the agreement. Any interpretation of the clauses should not be based on the headings.

Effectiveness

Because the parties may be signing at different times and in different locations, a question may arise about when the agreement becomes effective. This section clarifies that the agreement will be effective when the last party has signed and dated it.

Necessary acts; further assurances

This section explains that even if a party is not specifically required to sign a document or take some action by the agreement, the other party can insist on it if it’s needed to make the agreement effective. This allows the parties to make an agreement that doesn’t list every possible act that will ever need to be taken. If an act becomes necessary to make the agreement effective, this section requires the parties to perform that action. Note that this applies only to reasonable acts: a party will not be required to do anything and everything possible to make the agreement work.

Signature page

When the involved parties mutually agree with the terms and conditions stated in the agreement, they affirm the decision with their signatures. The signing parties need to include their name, their role in signing if they are doing it on behalf of their company, and the date when the agreement is signed. Once all the parties sign, the agreement becomes effective.

To make this process easier, LegalZoom offers eSignature services at an affordable price that can speed it up, irrespective of where the parties involved in the agreement are located.

Frequently asked questions

What is the meaning of general agreement?

A "general agreement" refers to a broad consensus or understanding reached among a group of people, typically in matters of common interest or importance. It signifies a widespread acceptance or shared understanding of a particular topic, indicating that most individuals within the group are in agreement or alignment regarding a specific issue or decision.

What was the purpose of the General Agreement on Tariffs and Trade?

The General Agreement on Tariffs and Trade (GATT), established in 1947, served as a multilateral agreement among 153 countries with the primary purpose of promoting the substantial reduction of tariffs, quotas, subsidies, and other trade barriers.

The purpose of the GATT was to promote international trade by reducing or eliminating trade barriers among member countries. GATT aimed to create a more open and fair global trading system, fostering economic cooperation and preventing trade disputes.

The agreement provided a framework for negotiations on trade-related matters, contributing to the growth of international commerce and economic development. GATT laid the foundation for the World Trade Organization (WTO), which succeeded in 1995, continuing the mission of facilitating international trade negotiations and resolving trade-related issues.

What is the General Agreement on Tariffs and Trade of 1994?

The General Agreement on Tariffs and Trade of 1994 (GATT 1994) is a global trade agreement that emerged from the Uruguay Round of negotiations conducted under the General Agreement on Tariffs and Trade (GATT).

GATT 1994 went into effect on January 1, 1995, succeeding the original GATT established in 1947. It serves as a cornerstone of the World Trade Organization (WTO) and encompasses a set of rules governing global trade, covering areas such as tariffs, non-tariff barriers, intellectual property, and dispute resolution mechanisms.

GATT 1994 aimed to create a more comprehensive and enforceable framework for international trade, facilitating negotiations and promoting the principles of non-discrimination, reciprocity, and the reduction of trade barriers among its member countries.

What was the General Agreement on Tariffs and Trade quizlet?

The General Agreement on Tariffs and Trade (GATT) Quizlet refers to a set of digital flashcards or study materials available on the Quizlet platform that cover key concepts related to the GATT. These resources typically cover details about the purpose, history, and provisions of the GATT, including aspects like tariff reductions, trade barriers, and the international trade negotiations it facilitated. The Quizlet resources can be valuable for individuals seeking to enhance their knowledge and preparation in the field of international trade and trade agreements.

What's a general agreement?

You need to have a contract to have a strong, clear understanding between two parties doing business. A specific, carefully worded general agreement clarifies the arrangement terms, expectations, and measurable outcomes. Protect your business by using a binding contract like a general agreement. To complete a general agreement, you must have certain basic information handy. These are:

• Who it's coming from: Name and contact information of your company
• Who it's going to: Name and contact information of the other party
• What the agreement is about: Give an overview of this contract
• Timing: Effective date on which the agreement will be signed and other deadlines