A contract is a legally enforceable agreement between at least two people or entities entered into for an exchange of goods or services. Contracts are enforceable by relevant law. Many different types of contracts exist; they vary by industry and commensurate with the type of goods supplied or services performed.
There are several broad categories of contracts that might be entered into in your business dealings. These categories include: sales-related agreements, leases, and other general business contracts. Of course, employment-related agreements also exist however these types of business contracts are more suited for a discussion of employment agreements in another post.
Sales-related agreements include a bill of sale, an agreement for the sale of goods, a purchase order, a warranty or limited warranty, and a security agreement. Each of these types document the different types of agreements that you may use when you are documenting the sale of your goods or services. A bill of sale documents the transfer of property from one party to another; an agreement for the sale of goods includes the goods or services to be sold, the price, the means of delivery and some other provisions that protect the parties in the transaction; a purchase order is initiated by the buyer offering to purchase a certain amount of goods or services; a warranty is a guarantee that covers the sale or purchase of goods or services; and a security agreement governs a secured transaction.
Leases really fall into two types of contracts, real property leases and equipment leases. A real property lease is used to document the terms of renting land, a building or other space usually used to run your business. Equipment leases come in many shapes and sizes, you may need a lease agreement for your copy machine or your combine, or anything in between. The distinction is that a real property lease usually governs things that cannot be picked up and moved whereas n equipment lease governs virtually everything else.
All other contracts vary and so can be lumped into a category of general business. These may include franchise agreements, indemnity agreements, settlement agreements, releases, assignments or novations of contracts, partnership agreements, joint venture agreements, agreements for the sale of a business, and many others. An agreement exists for almost any kind of business transaction you can think of, to find the right one you can contact an attorney who should be able to guide you.
Can you think of other contracts you should be using in your business?
If you are needing help with your business contracts, contact us to schedule your comprehensive Business Building Benchmark today so we can identify the best course of action for you.