Formal, written contracts between the patient and the treatment team have been shown to be useful in the inpatient management of borderline personality disorder by fostering a therapeutic alliance, containing dangerous behavior, and protecting the integrity of the treatment. The author discusses the advantages and disadvantages of such contracts and points out several common contractual errors, including making a contract too restrictive, allowing the contract to substitute for psychotherapy, and using the contract as a means of defense or punishment. She provides 12 guidelines, for formulating successful contracts, beginning with the need to clearly state the purpose of the treatment plan mutually agreed on by patient and staff.