A business agreement is a concession between two or more parties who come into a common understanding about a business related issue or topic. A partnership agreement is one of the examples of a business agreement where two or more parties pool their resources in order to acquire return on capital.
Most business agreements have that element of a confidentiality agreement since the agreement must be known by the business parties involved in that closed-door meeting. To know the format followed by business entities in drafting an agreement, here are samples of business agreement templates which you can look into and download from.
Small Business Agreement
Confidential Business Information Agreement Template
Business Acquisition Agreement
Purchase and Sale of a Business
Business Transfer Agreement
Agreement vs. Contract
The words agreement and contract are words which are used for the same definition in its business sense and are used interchangeably. But these terms have certain differences stated in the following:
- An agreement can be either in verbal or in written form; while a contract must be in written form.
- An agreement may not always be enforceable by law; whereas a contract has legality in its nature which concludes that it is enforceable by law.
- An agreement is similar to a promise and is not binding; contrary to a contract whereby the document produced by all the parties legally binds them to the written stipulations.
Although different from an agreement template, a contract agreement template is a form of agreement wherein parties take legal consideration of.
Vital Elements of a Business Agreement
Agreement Templates in PDF presented on this website show the following elements contained in a business agreement:
- Meeting of the minds. Parties must come to a mutual understanding when it comes to business agreements.
- Clear stipulation of goals. In a business agreement, the involved parties should indicate clearly what they want to accomplish, what duties to fulfill, and what commitments to do as shown on payment agreement templates where payment amounts and dates are specified.
- Prepare for the unexpected. No matter how cautious the parties are in fulfilling the agreement, there are uncontrollable factors that may affect the agreement. There must be a process indicated to face these circumstances.
Structure of a Business Agreement
A business agreement is created with this structure as presented on the sample agreement:
- Effective Date of Agreement – At the start of the agreement, an indication on when the agreement starts is written or agreed upon.
- Parties Involved Noted – Information on the business entities and individuals involved in the agreement must be stipulated.
- Obligations and Commitments – This section is prepared for what the parties commit to the business agreement. These obligations may be through volunteering or assigning.
- Payments and Contributions – The pooling of resources of parties not only covers the industries but also the amount of money. Discuss the due dates of these contributions and payments similar to the example on the lease agreement template.
- Cancellation Clauses – Specifications on the procedures you will do when the business agreement is terminated before the set termination date if it applies.
- Signature of Parties – Once the agreement is made final, every individual must affix his signature for confirmation.
Drafting a business agreement requires the presence of the business entities and individuals involved. In order to create smooth business agreement, there must be clear stipulations of the needed duties of each party in order to achieve the shared goals of the business agreement.