A model contract is an agreement between two or more parties that sets out the terms and conditions of a particular transaction. It is used as a template for future contracts, ensuring that all parties understand their rights, obligations and commitments under the deal. Model contracts provide structure, clarity and security to business dealings, helping to ensure that all stakeholders are aware of how the agreement works and what would happen if something were to go wrong. By setting up a straightforward and comprehensive system for crafting contracts, model contracts help to reduce misunderstandings and legal battles later on.