The 8 Common Types Of Business Contracts

The 8 Common Types Of Business Contracts

Contracts are a necessity when it comes to business. They establish the ground rules in a way that protects the interest of both parties. They also establish a set of conditions that both parties are obligated to follow. In the end, understanding different types of contacts is important for your business and this article will be oriented to presenting you the most common types of business contracts.

Salles contracts

Sales contracts are used to establish the basic information about the deal between the buyer and the seller. This insures the safety of both parties, protecting them from any risks. The terms mainly refer to the factors such as: 

  1. price
  2. payment terms
  3. delivery date
  4. guarantees and other factors

These types of contracts are useful as they are the best way to protect yourself from being undermind in someway. My advice is always to consult a lawyer before you sign any contract. If everything is good, your lawyer will give you the green light to go.

Lease Contracts

Lease contracts offer the possibility to rent a  property for a specific period. They are legally binding and can be a great asset to your business if you correctly use them. They are useful when a business requires to use a specific property for a specific period. Instead of buying the property, you can rent it instead and save money. The biggest advantage that leases contracts offer you is the possibility to get the space you need without making a large investment, this is helpful for small businesses and startups as they may not have enough resources for investment in the early stage of their business.

Employment Contracts

This contract is an agreement between the employee and the employer. The contract consists of basic terms and working conditions. Some of them are going to be salary, working hours, paid vacation days, etc. They are a necessity because they offer protection for both parties and they determine the price set of rules which serve as an obligation for both sides.

Partnership Agreements

Partnership agreements are contracts, as they outline the terms between two or more parties. The terms consist of factors such as management responsibilities, profit sharing, and dispute resolutions. These contracts are used when businesses want to merge into a partnership. They need to offer protection for every party, and in the case of a dispute, you are going to need a lawyer. This all comes down to your location in Australia and the business that you run. So, if you are in the construction business, you should find building dispute lawyers in Sydney. The contract itself should contain the clause which protects you in the case of the dispute, but, I advise you to talk to your lawyer to ensure that you are not undermined in any way. 

 Non-Disclosure Agreements

A non-disclosure agreement or better known as NDA  is a contract that protects a business’s intellectual property. They are legally binding and they are used to prohibit one party from giving the information to the third. In this way, the firm is secured from damage. This type of contract is most useful for companies that use the information to stay on the competitive edge. Better said, if the information were to leak out, they will lose that competitive edge. So, this contract is used to stop employees, contractors, or parties to share confidential information.

Service Contracts

Service contracts are agreements between a client and a service provider for the delivery of particular services. These agreements define the terms and conditions of the service, including the work’s parameters, cost, and due date. Businesses that offer technical or professional services, such as consulting, IT support, or marketing services, must have service contracts.

Franchise Agreements

Service agreements are contracts that are made between a client and a service provider for the supply of specific services. These contracts outline the terms and conditions of the service, as well as the specifications, price, and completion date of the task.

Service contracts are a requirement for companies that provide technical or professional services, such as consulting, IT support, or marketing services. This type of contract is best for businesses that want to expand by franchising.

 Agency Agreements

They are contracts between a principal and an agent. These types of contracts are used to outline the terms of the agent’s authority on behalf of the principal. This mostly regards sales and marketing, but it can also refer to distribution. This contract is used for people that want to increase their sales channels through their agents and distributors. A good contract should offer protection,  and if you want to minimize your risk, you should consult your lawyer before you sign anything, as a good contract will ensure your business is protected.

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