Types of Business Contracts You Should Know About

Running a business can be exciting for those who enjoy a fast-paced, always-changing environment. But what many people fail to realize is that there’s a lot of administrative duties involved, such as paperwork.

Businesses are built on the foundation of contracts, whether they are for clients, vendors, or employees. Contracts protect the rights of all parties. Even small business owners need to have contracts in place.

But which contracts do you need? Client business contracts are the most common. They outline the scope of work to be completed for clients. Here’s a look at some other common contracts.

Vendor Contract

Similar to a client business contract, a vendor contract spells out the terms of your relationships with suppliers and service providers. This type of contract should include elements such as pricing, delivery schedules, warranties, and termination. When negotiating vendor contracts, get several bids and consider long-term agreements.

Employment Agreement

If you have employees, you’ll need this type of contract. An employment agreement, also known as an offer letter, sets out the terms and conditions of a person’s employment. This agreement should include various elements, including pay, work schedule, time off, bonuses, benefits, and reasons for termination.

Independent Contractor Agreement

If your business works with independent contractors, it’s crucial to have an agreement in place. The contract should outline the description of services, compensation, project timelines, and

termination clauses. It’s important to specify that the contractor is not an employee and is responsible for taxes and benefits.

Partnership Agreement

If you’re entering into a partnership, you’ll want to have this type of agreement. It should include  elements such as decision-making processes, roles and responsibilities, profit distribution, dispute resolution methods, and buyout terms. This type of agreement can help ensure you and your partner are on the same page as well as identify ways to resolve conflicts.

Licensing Contract

This is a good contract to have if you have a product to sell and want to monetize your intellectual property. A licensing contract lets you earn money through your invention by allowing someone else to use it. This type of agreement should include terms such as payment, restrictions, reproduction rights and product exclusivity.

Nondisclosure Agreement

When you collaborate with others, you need to protect your trade secrets. A nondisclosure agreement can be used for employees, vendors, and clients to protect your confidential information. Such an agreement should include the definition of confidential information, purpose of disclosure, each party’s obligations, and how long the agreement should last. A nondisclosure agreement gives you the right to seek legal action against the other party if they disclose any information that is covered by the agreement.

Learn More About Business Contracts

Operating a business can be tricky and complex. Make sure you have the proper contracts in place to protect yourself.

Count on Orlando business contracts lawyer B.F. Godfrey from Godfrey Legal to guide you. We have negotiated, developed, drafted, and reviewed countless contracts. To schedule a consultation, fill out the online form or call (407) 890-0023.

Source:

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