5 Common Types Of Business Contracts
by: Ronnie Bitman, Managing Partner | June 13, 2019
With over 27 million entrepreneurs in the U.S., being in business for yourself is booming. Whether building your brand or you’re a seasoned business owner moving towards expansion, you’ll come across several types of contracts as your Florida based business continues to grow. Are you a business owner in Lake Mary? Here are the 5 common business contracts you’ll come across covering everything from equipment leases to employment agreements.
The first step towards building your business often includes brainstorming and creative collaboration, sharing your business plan with potential investors, etc. to produce the foundation on which your business model is built. This is when a nondisclosure agreement comes to play. A Non-Disclosure Agreement is a legal contract between at least two parties outlining confidential material or restricted access to information placing the signing party in strict confidence to use only the proprietary information for evaluation, partnership, and/or for a specific relationship, like employment.
An “NDA” or Confidentiality Agreement gives you, the business owner legal status if a vendor, supplier, service provider, independent contractor, or employee shares proprietary or confidential information about your business.
A well crafted Partnership Agreement maps out the relationship and responsibilities between two or more business partners. The business contract also sets the tone regarding each partner’s individual obligations, capital contribution, the profit/loss distribution, ownership interest and, a Partnership Dissolution clause.
Outlining partnership expectations and responsibilities before the partnership begins is ideal however, Partnership Agreements can be drafted during a business partnership. If at any time a partner wishes to change any terms of the agreement, it is highly recommended that it’s done in writing.
**Partnership Agreements are subject to the laws of individual states. Unsure of what the requirements are for a Florida Partnership Agreement? Contact Us for a consultation.
Comparable to a liability waiver, and often called a “hold harm clause” an indemnity agreement holds a business or company harmless for any burden loss or damage. Often used for high risk businesses such as those involving animal interaction or skydiving but are also helpful when dealing with commercial contracts, legal contracts, shipping contracts, loan agreements, supply agreements, licensing agreements, construction projects, and leases.
Essentially an indemnity agreement is a contract in which one person agrees to indemnify, or “hold harmless” another person related to a specified product or service and/or damages resulting from a specific agreement.
With Indemnity Agreements becoming increasingly valuable year over year protecting your business from liability with the right form of indemnity clause can make all the difference.
Need assistance in determining the right Indemnity Agreement for your business needs?
Property And Equipment Lease
When beginning the journey of building your business purchasing the equipment to compete within your market may not be an option. That’s when a Property And Equipment Lease will come into play. These contracts spell out the terms and conditions of a lease for a building or piece of equipment, including monthly payment, deposits, terms, maintenance agreements, and other related items.
When drafting a Property or Equipment Lease certain provisions need to be included beginning with introducing parties. This is where you will define the “Lessor” and the “Lessee” and the length of the agreement. Recitals define the world of the agreement providing background information for each party. From there each section on the contract covers in specific detail the Acceptance of the Lease, Term, Rental Payments, Security Deposit, Ownership, Responsibility of Care, Insurance, Taxes and Fees, Liability for Loss & Damage and so on.
A Property Lease or Equipment Lease protects your personal investment and can be drafted to suit your specific needs with additional sections.
General Employment Contract
Hiring employees shows growth and success within your brand. Having an employment contract clarifies the relationship between you and your employee, including compensation, benefits, duration, grounds for termination, and any other issues that relate to your business including ownership of works produced.
The federal government has strict criteria for determining whether a business relationship is employer/employee or an independent contractor. If you enter a relationship with a person to provide a particular service or complete an individual project, you’ll likely need an independent contractor agreement that lays out the terms for that project or service.
As a business owner you wear many hats daily. Let us help you protect the sanctity of your business and provide peace of mind with a professional contract agreement suitable to the needs of your ever growing business.