Contracts are legally binding agreements between parties that include certain things the parties have to do and agreed upon terms. Although some contracts are informal and are only spoken or implied, most contracts are written down in documents, further formalizing the agreement. Written contracts are generally preferred, because not only does it make the agreement seem more legally binding than it already is, it also provides more protection for the parties involved.

Once a contract has been completed between two or more parties, a contractual relationship then arises between or among them. The most common contracts (and contractual relationships) that we encounter have something to do with sale, lease, tenancy, and employment.

How to Design a Contract Approval Sheet

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In this article, you will learn about 1) written contracts and 2) how to design a contract approval sheet.


When should a contract be written and when will a verbal agreement be enough for it to be enforceable? There are simply some transactions that, by their nature, require the details of the agreement to be written down in order for it to be enforceable. Examples of such contracts are:

  • Employment contracts, between an employer and an employee
  • Transfer or sale of real estate property such as land and buildings
  • Installment sales
  • Insurance contracts
  • Promise to pay a debt
  • Any contract that takes longer than one year to be completed

Earlier, it was mentioned that putting contracts in writing protects the parties more than when they are verbal or simply implied. Business contracts, in particular, are recommended to be put into writing, considering the gravity and scope of the contents or terms involved in the contracts.

A written contract is very useful in settling, and even avoiding, disputes that may arise later on. This is one of the main reasons why cautious businesspeople prefer written contracts, as disputes can become costly when they cannot be settled early on. This also prevents any of the parties from changing their minds or reneging on what they initially promised or proposed to do or perform.

Depending on the type of transaction involved, there are applicable formats for written contracts that are used. In business, organizations often take it upon themselves to come up with standard formats or templates for contracts. There are, however, parts that must not be omitted. One of them is the Contract Approval Sheet.


Parties entering into a contract will undergo a series of negotiations, where all the finer details of the contract will be discussed and pored over. One person or point of contact will be tasked for the contract preparation.

Once the final draft of the contract has been prepared, complete with all the conditions, requirements and specifications, if any, that were taken up during negotiations, it will then be subjected to approval, and for that, there is a need to prepare the Contract Approval Sheet.

Before you can perform the terms of the contract or avail of a service being contracted, you must first seek approval to do so, and that requires the Contract Approval Sheet. This document must be prepared and fully accomplished before any new contract is awarded.


The Contract Approval Sheet will contain all the required signatures from the proper signatories. This is because this document shows the written consent by the authorities or contracting parties to proceed with an activity that has been requested or negotiated. Accomplishment of the approval sheet means there is a go-ahead to proceed with the terms of the contract that has been proposed.

If you look at various samples of Contract Approval Sheets, you will find that there is no fixed format. There are differences in format and even some content and word choices. However, considering that these sheets have the same purpose, there are standard contents that must be included in them.


The person who should prepare the Contract Approval Sheet must be someone who has a full understanding of the details of the contract – what it is for, and how it will be performed or accomplished. This knowledge will help him determine how to design the sheet.


What are the items that must be included in the Contract Approval Sheet?

We can divide the sheet into two: the technical information part and the approval part. The technical information will contain all the details regarding the contract, while the approval portion will be where the approving official or officer will affix his or her signature.

  1. Individual or Party initiating the contract. This may also be the department that is initiating the contract, if applicable. Also indicate the phone numbers or other contact details of the initiating individuals or parties.
  2. Date that the contract has been initiated.
  3. Description of the contract. Provide a brief yet concise summary of the contract, tackling the highlights and most important details, such as:
    • The contractor or the other party;
    • The purpose of the agreement or contract;
    • The requirements of the contract;
    • The costs involved;
    • An indication of the status of the contract, whether it is a new agreement, a modification of an already existing contract or agreement, or a renewal of an existing contract that is close to the end of its term;
    • Any changes or alterations made on the contract, and the pages in the contract where they are reflected or made;
    • The period of performance of what is indicated in the contract; and
    • Any involvement of government, federal or other regulatory bodies in the contract.
  4. Review history of the contract. Indicate whether the contract has already been reviewed by other regulatory bodies or departments, such as Legal, Administrative or Risk Management, whichever is applicable.
  5. The number of original contracts that will be signed, as well as their respective recipients.
  6. The approvals and authorizations required.

Once the Contract Approval Sheet has been prepared and filled out, it will then be presented to the Approving Official for proper action, which is either to approve or disapprove. Often, his signature will appear at the bottom of the sheet. In many cases, it is also advised that the name of the person who prepared the document be clearly indicated on the page, as well as his signature.

The design of the Contract Approval Sheet will largely depend on the type of contract that will be entered into. This is why it is important that the task of designing and preparing the document should be assigned to someone who is privy to the finer details of the contract.

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