Properly drafted written contracts protect you and your business’s interests. A written contract is not just an important aspect of business agreements, it is critical to both parties that the terms of any business contract are expressly stated. Having a written contract means that everyone knows exactly what they are supposed to do.
Also, having expectations in writing increases the odds of the transaction being successful and makes terms easier to enforce. Just knowing everything is in writing can exert pressure on everyone involved to meet their obligations on time and as written. The Cary Grove Area Chamber of Commerce explains the basics of handling the contract-making process.
General Business Contract
These are the contracts that refer to the business's internal operations. Partnership agreements refer to the relationship between partners and their stake in a company. Then there is an indemnity agreement that protects a person from legal damages if something bad happens. Many businesses now use a nondisclosure contract forbidding others to disclose sensitive or secret information regarding the business's practices and/or products. And lastly, an equipment and/or property lease contract.
Bill of Sale
A bill of sale is a short-form legal contract used to transfer an item or property from a seller to a buyer. A bill of sale typically describes the specific item that is the subject of the sale and identifies the purchase price. It names the buyer, the seller, and the location of the transfer of the item or property.
Bills of sale are common in business asset sales, sales of vehicles, and estate sales.
There are templates you can choose from that are downloadable and customizable for your business.
Employment Agreement
An employee agreement will cover all of the employee’s duties and obligations and offers both sides legal protection if needed. For instance, it might stipulate how long the employee is contracted for, their rate of pay, and other pertinent information regarding their employment status. It should also cover the terms of bonuses, the amount of time the employee is expected to work, and any situation under which the employee may be terminated.
Contract Negotiations
The process of negotiating a contract begins long before you actually reach the negotiating table. It’s critical you do your research before trying to negotiate a contract. Even just looking the other party up on Google or simply asking them about themselves and their business can help you prepare. You also need to go into negotiations knowing what you want and how much you’re willing to flex on those requirements.
Being able to successfully persuade the other party requires you to have a thorough knowledge of their understanding of what is involved and what they expect from the deal. Ask yourself how this deal benefits you and them.
You can always start with a rough draft of the generalizations, then begin filling in the details. It shouldn’t be so long and tedious that it passes understanding for each party, so keeping the terms as simple as possible is desirable. However, prioritize those points that are critical to you. Try to be flexible when possible, and remember you may want this to become a long-term relationship; therefore, it’s important to strive for a win/win.
Information and Software Tools
If you’re just starting out in business, you may not have enough funds to hire a lawyer to write a contract for you. But, if you’re pretty sure you could customize a template to suit your needs, it is possible to find one online. Docracy is one open-sourced collection of contracts and other legal documents that provide a place to share your documents and download new ones, as well as sign them electronically.
Sign Now allows you to collect signatures by email or create a link that you can post anywhere. You can collect signatures on any device, and signatures will look like real ink.
You may be able to use sections of a current business contract to create a new contract. To do that, you need only utilize a PDF extract tool to upload your PDF and extract certain pages in order to create a new contract.
Understanding the components of a contract, how to negotiate one, and the tools available to you will make creating a successful contract easier and more efficient. A well-written contract gives you and your business the protection it needs to stay legal and compliant.
