As a business owner, you will come across many different forms of contracts because of the significance they hold. They will range from employment agreements and general contracts every business has, to specialized contracts that will only be applicable to your industry. You have most likely used some of these contracts already in some area or another. Here is a general breakdown of the most common business contracts that business owners will use.
General Business Contracts
These types of contracts are the foundation to the structure of your business.
Partnership Agreement: This is a contract between two parties to establish a partnership for a business venture. This has been expanded upon in a past post.
Indemnity Agreement: These contracts are used to indemnify someone, as protection from potential harm. For example, if you ever rent a car you will sign one to protect against the possibility of damages occurring and holding you responsible.
Nondisclosure Agreement: This is a privacy agreement between multiple parties in which information is shared within those involved in the agreement. This has been elaborated on in a past post.
Property & Equipment Leasing: This type of contract is an outline to the process of leasing, the financial stipulations, and the rules that go along with using the space or equipment.
Sales-related contracts provide an outline for the coverage of goods, property, and services, as well as transferring titles.
Bill of Sale: This is a document for the transfer of a title to another party, and provides proof of the legal agreement. An example of this is the sale of a motorized vehicle or of property.
Purchase Order: This is a document representing an agreed upon arrangement for the purchase of something. This will include the price, delivery date, and quantity.
Security Agreement: This is to make use of physical property as collateral for a deal. So if you cannot repay a loan for example, the asset would be given as payment.
Employment contracts are important protection for you as the owner because they will cover any aspect of employment relationships you may encounter.
General Employment Contract: This is the most common contract that will list the expectations, wages, benefits, termination, duration, and any other important facets that need to be added.
Noncompete Agreement: This is a contract that designates how long an employee cannot work for a competing company after departing your company.
Independent Contractor Agreement: This is a line that is difficult to distinguish at times because of the ambiguous definition established by the government. The need for this is when you hire someone with a specialized skill that is necessary for a particular project. This type of contract will lay out the complete terms and expectations in accordance to the contractor hired.
When you are entering a relationship with another party in your business, it is essential to have contracts to protect your privacy and financially protect you. The contracts listed above are the basic ones that are applicable to almost all businesses. If you have any questions about contracts, contact an attorney to help you with the process.