According to Statistica.com, around 55% of adults in the United States invested in the stock market from 1999 to 2018. Investing is a great way to grow your money; however, you must pick wisely on where to invest your funds. According to Will Graham's " A Quantitative Analysis of Victims of Investment Crime" older males, many of whom are retired, are victims of investment fraud. This is the reason why everyone should be aware of how investing works and the role of contract in negotiations like this. The guidelines below will help you in writing your stock or business investment agreement or contract. it would help you protect yourself from the investment fraudulence.
1. Determine the Parties Involve
Identifying the parties involved is vital in every investment agreement, whether it is a product investment contract or a real estate investment contract. The details of each party should be mentioned in the contract to avoid miscommunication and misunderstanding. The details include the name, company name, contact information, address, etc. of the investor and the investee.
2. Apply Clarity and Conciseness
Legal documents such as an affidavit, memorandum, and contract are technical papers, therefore, it should be clear and concise all the time. An investment contract is not a creative piece that uses flowery words to entice the reader; rather, it is a legal agreement that states facts. Being clear and concise enables the reader to read directly the purpose of the contract and it also prevents miscommunication.
3. Include Payment Method
Even though you are investing in a small business, a payment method and a payment schedule should still be included in the contract. By having a payment method, you can easily decipher how the client should pay what he/she has invested— whether it is on cash, credit/debit, check, or installments.
4. Terms and Conditions
In writing your investment contract, never forget to put the terms and conditions of each party. A good simple contract should be fair to both parties. Your contract should not be one-sided, therefore, both the investor and the investee can benefit. Apart from the terms and conditions, also put the "whereas" and "therefore" statements.
5. Ask for Legal Advice
An investment management agreement or contract is a legally binding document, therefore, it is enforceable by law. It is important to ask for some legal advice whenever you are writing a contract. Having it proofread by an attorney will make your contract better and stronger.
The signature signifies that you agreed to the terms and conditions written. Gathering the signatures of everyone who is part of the transaction is the final step of your contract writing. A contract signed is an agreement sealed. Although the signature is located at the bottom part, it is still one of the most important parts of a contract.