1. Contract Benefits
2. Contract Basics
3. Covering Details
4. Verbal Agreements

You can find samples of business contracts online, or you may draft one yourself. As a small business manager or owner, you may have to complete various contracts and forms to comply with local laws and mitigating risk. For example, new employees usually sign employment agreements that list the following:

  • Work requirements
  • Compensation
  • Non-disclosure agreements
  • Arbitration agreements

You should especially use a contract if:

  • Your business intends to sell or buy products from another entity
  • Your business provides services or receives services from other businesses

All agreements should be drafted in writing. Additionally, you may have an agreement in place, but people tend to forget the agreement or change his or her mind and will try to retract the deal.

Contract Benefits

A written agreement does not allow other parties to escape an agreement and prevents potential miscommunication in the future. A business contract also ensures that:

  • All parties get paid on time
  • A project needs gets completed on time
  • Products be delivered in a timely manner

In regards to a product, you may note vital details such as:

  • Order date
  • Deliver and acceptance requirements
  • Order quantities
  • Warranties
  • Payment details

If you’re receiving or offering a service, you may use a business contract to specify performance dates, the level work, and payment provisions.

Contract Basics

When it comes to contract basics, a product needs to be offered (the offer), and something will have to be exchanged for that product (i.e. money). Otherwise, such a transaction would boil down to gifts and promises rather than a solid contract (the consideration). Further both sides have to accept the contract terms (the acceptance). Both sides also have to agree to all of the conditions and accept that they are in an agreement (mutuality).

When considering a contract, you should first read it carefully regardless of whether you drafted it yourself or obtained a template. You should check all information and understand what you will agree to. In addition, check that all details and names are correct and have been spelled in the right manner. Look for ambiguous or unclear language to prevent potential misunderstandings.

Read the fine print, and ensure that you know the meaning of all terms you may not be familiar with. After you sign the contract, it is a legal agreement that you may be stuck with, otherwise you could face a breach of contract and potential legal ramifications.

Certain contracts contain what’s called an indemnity clause, which assigns responsibility to you or other parties. Look to see if a contract contains an indemnity, and determine if such a clause would apply to you.

Also, you should research local laws and regulations to see how it may affect you. Contact the services of an attorney if necessary, even if you have a template agreement. Such regulations may include industry associations or union mandates. Further, you may have to get insurance if the contract requires you to obtain a policy, and you may have to pay fees or obtain permits before starting a project.

Covering Details

When detailing an agreement, ensure that you cover the following:

  • Information on both parties
  • Start and end times
  • Key terms
  • Products and services being received or provided
  • Payment terms and due dates
  • Fees and interest on late payments
  • Liability clauses or insurance
  • Dispute resolution clauses

Ensure that you look for all places that need to be signed or initialed. Further, cross out all blank spaces to prevent someone else from filling them in. Moreover, make a copy of the contract, and get two original signed copies if you’re able to. At the very least, ask for a copy, and ensure that the document is accurate. Keep the copy in a safe place for future references in case you need it in the future.

Verbal Agreements

Certain verbal agreements are viable in court, but a written contract reveals what parties had signed and agreed to. If you dealing with a legal battle without a contract, you need to provide as much evidence as you can regarding what you and the other party agreed to. Keep all invoices, quotes, or emails as evidence to prove your case. However, a written agreement is a better alternative than scrounging around for evidence.

To find out more about samples of business contracts, submit your legal inquiry to our UpCounsel marketplace. UpCounsel’s lawyers have graduated from some of the best law schools in the nation and will help you find a contract that safeguards your interests and goals. In addition, our lawyers will help you draft a custom agreement that complies with labor laws and protects you legally.