What Is A Business Contract?
A business contract is a legal agreement between two parties involving goods and services rendered from one another equivalent for a fee or specific duty to fulfill. It is enforced with legal action to protect both parties from being taken advantage of. A business contract is composed of sections, namely the parties, signing authority, considerations, receipts, terms, conditions, and important dates. The four most common business contracts are sales contracts, employment contracts, general business agreements, and property contracts.
How To Make A Business Contract?
A simple contract is entitled as a binding specimen to the partnership between businesses and companies. It will prevent misunderstandings and disputes and would provide legal remedies for those who will breach the contract. A contract is a serious matter but does not be intimated with it. As long as you follow these tips in writing a business contract, you are good to go.
1. Know General Contract Considerations
Before writing a contract, you need to consider things. Determine if you and your business partner are capable of legally involved in a contract. Also, know about the contract's considerations as it will involve an amount. Afterward, understand the legal purpose of the agreement. Lastly, make a list of the terms and conditions for both of the parties. After knowing these factors, you are now equipped to make a legal agreement.
2. Begin With The Basic Information
To start writing your contract, you need to indicate the date at the top of the document. Afterward, mention the person or company name of the parties involved. If there are specific honorifics that you need to indicate, place it. There are instances wherein someone is a representative of a person or company for business presentation, so note the name of the authorized person on behalf of the company.
3. Give Details To Each Items Involved
For your business contract, you need to clarify what goods and services are being exchanged to your client. Use primary language as possible for the sake of the understanding of both parties. It should also explain what the business is offering and its service to provide. E.g., if you are in the real estate industry wanted a residential contract, describe the property and its location. However, if you are selling goods or services, describe them detail by detail. Also, indicate acceptable payment terms for you and your partner.
4. Add Confidentiality Statement
The confidentiality statement is similar to a non-disclosure agreement. Adding a confidentiality statement is optional. But if you want to secure that the contract must only be for the independent parties involved, adding a confidentiality statement is your option. Together with the confidentiality statement, you can also add a non-compete clause wherein it prohibits someone from engaging in a similar service to a competitor if the termination of the account is not yet implemented.
5. Add Breaching Of Contract Conditions
Your contract must indicate as to how will the breaching of the contract be taken care of. Add who will pay for the attorney, court cost, and the remedy for contract breaching. But it is accustomed that each party will pay their legal fees. Also, indicate how long the legal contract is going to. If it will be a one-time transaction, state that the termination of the contract will happen after the service. If it is an ongoing contract, you can add terms that would cause the parties to terminate the agreement. You can also make a separate termination contract for it.