Contracts are essential to keeping a business moving, and this is especially true for locally-owned and small business. Paperwork protects both businesses and clients, and also keeps everyone’s intentions and desires clear. This week, we are exploring the most common business contracts that you encounter as a business owner and entrepreneur.
While some entrepreneurs and owners are independent, many others work with a partner. While there are some challenges associated with business partnership, they are oftentimes fruitful. In order to keep any significant issues at bay, partnership agreements are essential.
A good partnership agreement is like a plan that outlines responsibilities and duties of the partners. This is an essential way to keep small disputes from spiraling into big ones. Outlining the relationship in a clear and cogent way keeps partnership expectations realistic.
Ideally, partners draft a partnership agreement at the start of the enterprise. However, ideal situations do not always happen. It is completely legal to draft a partnership agreement after the business is up and running. This most commonly occurs when partners start a small business that experiences rapid on unexpected expansion.
Employment Contract & NDA
Employment contracts and non-disclosure agreements are important for the same reason that partnership agreements are. This hiring paperwork makes sure that there is a clearly defined relationship between employee and employer. There are certain things that employers need to include in hiring paperwork.
- Identify all parties involved.
- What type of position is this for?
- Responsibilities of all parties.
- Any expectations for professional licenses or certifications.
- Employment benefits.
- Termination of contract.
Businesses are using NDAs and no compete agreements more than ever. While NDAs do protect the company, they also protect clients and client information.
Commercial leases are contracts that allow business owners to obtain a space to operate their business. Above all, they are rental agreements for business. There are many different types of leases that require different levels of financial responsibility from the tenants. Learn more about the basics of commercial leases here.
In addition to leasing business space, business entities lease equipment as well. There are some items that business lease more than others.
- Commercial vehicles
- Medical and scientific equipment
- Construction equipment and vehicles
- Restaurant back of house equipment and front of house décor
- Industrial machines
Other Common Business Contracts
- Bill of sale or agreement to sell
- Warranty (This one is unique, as it is between the business and the customer.)
- A franchise or franchisee agreement
- Legal release of liability (Legal releases are between businesses and employees as well as businesses and customers. It operates on the assumption that the party signing knows there is a reasonable risk for working or acting as a client for the business. This contract simply releases the business from responsibility.)