Essential Contracts in Business

Businesses enter into several arrangements and deals in the conduct of their affairs. Their lawyers see to it that these business agreements are comprehensive, properly planned and protective. A well-drafted and executed contract is important in business operations.

Here are some of the common business contracts that companies enter into:

• Employee agreements – This contains the employer-employee contract agreement, which also includes the job offered and descriptions, the responsibility of the job, salary and benefits, and the status of the job whether it is “at will”, or not.

• Confidentiality and Invention Assignment agreement – This agreement ensures that business strategies, ideas, and other work product developed by the employee will be kept confidential and will remain as company property even when the employee leaves or terminates his contract.

• Services contract – This agreement provides the terms and conditions under which a service must be rendered and details of the responsibility and liability limitations.

• Sales Contract – Gives the price, terms and conditions for the sale of goods, equipment and other company products.

• Confidentiality and Non-Disclosure Agreement – This agreement binds the recipient of an informant to hold information in strict confidentiality and use it only to evaluate business transactions.

• Contractor and Consultant Agreement – This agreement is made for private contractors and consultants working on short-term basis with the company. This agreement contains job description and the limits of their responsibility, including the payment rate and their period of employment.
• Property management agreement – This agreement is made when the company rents or leases an office building, an apartment or a storage building as depot.

• Partnership Agreement – An agreement made by business partners specifying the amount of contributions each member has, the percentage of each member in the profit, and the terms of division.
There are several other agreements that a business can involve itself across the span of its operations. Business agreements and contracts may be advantageous to business as it can increase profit, earn respect and multiply prospects. But bad contracts can be disastrous and could sometimes cause the downfall of business.

To make better contracts, the following tips may be helpful:

• Make a clearly written contract spelling out the responsibilities of each party.

• Make sure that all key statements and representations are explained. Avoid omissions and incomplete terms.

• Study sample contracts to learn the structure and language used.

• Draft a form to suit your needs.

• Write the draft of the contract yourself and consult the lawyer.

• Keep in mind the required legal terms, clauses, structure and language of the contract.

• Attached an addendum or exhibit in the main contract as basis for specific documents for different transactions

• In the end, include miscellaneous clauses or “boilerplates” to the contract.

The goal in drafting a contract is to have a clear meaning and understanding of the deal. To achieve this, it is necessary to use language that is clear and concise because the key to a good business deal is a well-written contract.