Running your own business can be both exhilarating and fulfilling, but it’s essential that you understand all its details, including contracts. From employment agreements to lease agreements, we’re sharing 10 essential contracts you shouldn’t neglect when starting up a new business. Dive deep into these key agreements that could help your venture thrive. Thanks to AI and other tools, you can easily find templates for these contracts.
Employment agreement
A legally binding agreement between an employer and employee outlining the terms and conditions of their employment, such as salary, benefits, hours of work, and job responsibilities.
Nondisclosure agreement (NDA)
Also referred to as a confidentiality or secrecy agreement, this contract prevents people from disclosing confidential information to third parties without written permission from both parties involved. These contracts are frequently used in business negotiations to protect trade secrets and other forms of proprietary data from being shared outside their firm’s walls without their written consent. For an additional edge over competitors, try NDA management software from Ontra.Ai to easily create and manage NDAs.
Many employers have new workers sign NDAs.
Partnership agreement
A partnership agreement is an agreement among two or more people who want to form a joint venture or business partnership together. This document details each partner’s responsibilities, how profits will be divided among them and what happens if one wishes to leave, among other things.
Lease agreement
A contract between landlord and tenant that outlines the terms of a lease agreement. It should include its duration, rent payments, maintenance requirements and any other necessary details.
License agreement
One party grants permission for the use of its property or technology by another on specified terms. Many SaaS companies use these. Companies often enter license agreements between themselves for patent access in exchange for fees or royalties.
Service level agreement (SLA)
An agreement between service provider and customer stating the quality level they will expect from each other. Service level agreements can be used when outsourcing certain services and typically define metrics such as response times, availability percentages, uptime hours and other indicators of service quality.
Non-compete agreement
A non-compete agreement is a document in which employees pledge not to compete with their employer’s business after leaving employment with them. This contract prevents employees from using knowledge gained while employed with one company to start competing businesses or work for competitors after leaving employment with that particular one.
Vendor agreement
An agreement between vendors and other parties that outlines the terms and conditions of purchasing goods or services from them. Vendor agreements generally cover payment terms, delivery schedules, product warranties and more.
Guarantee agreement
One party promises to compensate another if something does not go as expected, like when hiring a contractor to build an addition on your home. A guarantee agreement ensures that it will be completed as specified.
Joint venture agreement
An agreement among multiple parties that outlines each of their roles and responsibilities as they collaborate on a specific project. Additionally, this document also sets forth how profits will be divided among partners as well as decision-making procedures during its term.
These 10 essential contracts form the backbone of any successful business. Understanding which agreements you require and their purpose can help protect against potential issues down the road. Be sure to review each contract thoroughly prior to signing anything.
Marette Flora is the founder of Floradise blog and personalized gift shop. Marette is a passionate storyteller and creator. She attended the Walter Cronkite School of Journalism at Arizona State University and obtained a bachelor’s degree in journalism and mass communication.
She is passionate about creating helpful and meaningful things.