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Common Types of Business Contracts

Are you planning to launch your own business?

We know you probably will be juggling many essential tasks, such as finalizing a business model, arranging the finances, and hiring staff, among a host of other things.

However, there’s another very crucial aspect you simply cannot miss.

Wondering what we are talking about?

Preparing business contracts!

To guarantee you are properly insured from legal complications and unexpected losses, you will have to put in place dozens of business contracts.

To make it simple, here is a guide to the three types of ‘Business Contracts’ you’ll surely come across:

1. General Business Contract

General business contracts include terms such as how your company is established and how the interests of different stakeholders are safeguarded.

The common contracts you would encounter are:

Partnership Agreements: A partnership agreement spells out the relationship between partners, as well as their individual obligations and contributions to a business.
Indemnity Agreement: This contract requires one party to indemnify i.e. pay for any losses or damages caused by the other party.
Nondisclosure Agreement: This legal agreement prohibits the disclosure of any information
Lease: These contracts include the terms and circumstances of a lease for a facility or piece of equipment, such as the monthly payment, deposits, periods, maintenance agreements, and other relevant procedures.

2. Employment Contract

If you want to recruit staff for your business, you will need an Employment Agreement. This form of contract officially establishes a person’s employment terms and circumstances.

It can include how much employees will be paid, how many hours per week they are expected to work, what type of bonuses they can receive, and why their employment can be terminated.

You would come across these contracts while hiring employees:

General Employment Contract
Noncompete Agreement
Independent Contractor Agreement

3. Sales Related Contracts

Sales contracts are legal agreements that set out how property, goods, and services are bought and sold.

Some common types of sales contracts are:

Bill Of Sale – A bill of sale is a hybrid legal document that both transfers title and proves that a formal agreement (contract) was made on the sale’s terms.
Security Agreement – A security agreement secures a loan by pledging an asset as collateral. In case of default, the asset belongs to the lender.
Purchase Order – A purchase order is a straightforward commitment to buy an item or several products at a certain price.

Manage Your Contracts!

Many of the relationships and situations that company owners face are covered by contracts, and it can be one tedious task to manage them all at once.

That’s why having a qualified corporate attorney on your side is the way to go.

Hecht Schondorf has a team of the most experienced and professional corporate lawyers who can cater to all your business contract needs, empowering you to successfully set up, run, and grow your business.