Different Agreements: Everything You Need to Know
Different agreements or contracts are required to ensure the successful operation of a business.4 min read
Different agreements or contracts are required to ensure the successful operation of a business. Some examples of such standard business agreements or contracts are the following:
- Terms and conditions
- Terms of business
- Privacy policies
- Shareholder agreements
- Employment agreements
- Nondisclosure agreements (NDAs)
Before getting into business, it's important to know the various business contracts that are required to run a business. It's not necessary for you to be a trained lawyer. However, you do need to have a basic knowledge of business law. In some parts of the world, you won't even be allowed to do business without the required licenses and agreements.
That's why it's important to have an understanding of how business agreements work. You should know what issues business agreements address, how they apply to such issues, and the legal consequences of breaching them.
Terms and Conditions
Terms and conditions are the regulations that make up an important part of a contract, which requires parties to accept and comply with certain rules or conditions in order for legally valid transactions to take place. The breaching of terms and conditions is categorized into four major groups:
The following are some of the ways terms and condition can be breached:
- Failure to properly deliver goods
- Failure to properly render services
- Delivering substandard goods
- Rendering poor services
- Failure to pay for satisfactory goods
- Failure to pay for satisfactory services
- Failure to honor warranty terms
Terms of Business
A company's terms of business is a set of agreements between parties to ensure the provision of a service in compliance with the binding agreements. Terms of business typically cover the following:
- Obligations of customers
- Details of payments and charges
- Termination of contract
- Liability limitation
- Consequences of termination
- Governing law
- Jurisdictions of dispute resolution
If there's a breach of the terms of a business, the affected parties can claim damages, which are then determined by the court.
- The company otherwise referred to as “we/us/our” is pledged to respect and safeguard the privacy of the personal information of our clients.
- The policy of protecting the personal information of our clients is the basis on which any data we obtain from them or which they give to us will be received, processed, and kept by us.
- We, [business name], located at [business address], as the data controller in this transaction, are hereby affirming responsibility for the protection of the personal data of our clients.
Shareholder agreements are contracts that ensure a harmonious partnership among shareholders and govern the operation of the business. Shareholder agreements cover the duties of the shareholders and directors, methods of dispute resolution, and minor shareholder protection. Shareholder agreements should also cover the following:
- Issues that need specific shareholder permission
- Provisions for deadlocks
- Transfer of shares
An employment agreement is a contract between an employer and an employee that states the duties of the employee and the responsibilities of the employer. It also specifies the following:
- Employment commencement date
- Employee job title
- Employee salary
- Venue of employment
- Vacation entitlement(s)
- Sick leave entitlement(s)
- Terms of employment termination
If an employee breaches an employment agreement, they can lose their job. However, if the employer breaches an the employee agreement, the employee can take definite actions against the employer. It is recommended for the employee to first try resolving issues internally by talking things over with their employer.
If that isn't successful, the employee can resort to an employment tribunal. And if that still doesn't help, the employee will have to go to court.
A nondisclosure agreement is an agreement between parties in a contract to keep certain disclosed or exchanged business or personal information secret. A nondisclosure agreement can also be between a business and its employees. In that case, the agreement would require that the employee not reveal the business secrets of their employer.
A nondisclosure agreement identifies both parties. It also states which information is confidential, the confidentiality level that the recipient is expected to maintain, and the rest of the confidentiality terms.
In the event of a breach of a nondisclosure agreement, it is recommended that the affected parties seek advice from the court, which can pass a court order that the parties must follow. The solution could be any of the following:
- Claim of damages
- Splitting up
- Sanction (restriction)
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