What must both parties in a contract do to ensure that the terms are clear and agreed upon?

Negotiating the terms of a contract is essential for both parties to ensure that there is a clear understanding and agreement on what is expected from each side. During the negotiation process, both parties discuss their needs, preferences, and any specific conditions they want to include in the contract. This collaborative dialogue helps to eliminate ambiguities, confirming that both parties are on the same page regarding the contractual obligations.

While having the document reviewed is beneficial for legal accuracy, and exchanging something of value (which refers to consideration) is necessary for the contract to be enforceable, neither of these alone guarantees mutual understanding of the terms. Clarifying obligations is also important, but without the negotiation process at the outset, there may still be misunderstandings about what those obligations entail. Thus, negotiation stands out as the fundamental step that sets the foundation for a clear and agreed-upon contract.