Few things are more exciting than opening your own business. Watching your vision and planning transform into an operational business is exhilarating.

What Types of Business Contracts Can a Contract Attorney Help Me Draft?

That said, there are also numerous stressful moments as you prepare to open your doors, whether they are physical or virtual.

Working with a highly skilled Houston Contract Attorney is a great way to ensure you have all your bases covered, including drafting the business contracts needed to protect you and your company.

What Is a Business Contract?

A business contract is a legal document outlining a transaction or set of expectations between parties. There are many types of business contracts, and some types of businesses require more contracts than others.

All business contracts are legally binding agreements. At a minimum, they should include the following:

• Identification of parties bound by the agreement
• Promise to perform a service, deliver a product, or make good on a duty
• Full terms and conditions of the agreement

Meeting these requirements is just the first step. Ensuring that the business contract is properly drafted and that it adheres to the applicable rules of law is also essential.

What Are Some Common Types of Business Contracts?

There are many types of contracts commonly needed to start, expand, or even dissolve a business. Of course, you won’t need all of these different contracts, but knowing what is available can help you decide which contracts you need now, and which you may find you need in the future.

Partnership Agreement

If you are going into business with one or more partners, this contract should be your top priority. Far too many businesses fail because partners go into the enterprise without a clear understanding of what is expected from each partner and how various issues will be handled.

A great partnership agreement will detail how each partner is expected to contribute to the business. Having this all in writing and clearly communicated between partners is the best way to get started on the right foot.

Nondisclosure Agreement

If you expect to work with individuals within your business who will create or have access to confidential or proprietary information, you may want to look into creating a nondisclosure agreement that is specific to your business.

This type of contract is often used to clarify expectations between business owners and independent contractors, vendors, suppliers, or even freelancers.

A great nondisclosure agreement can prevent an employee or contractor from using your company’s innovations or designs for use in another business setting. Without one in place, protecting your rights in court can be an uphill battle.

Property and Equipment Lease

Not everyone can purchase the full scope of equipment needed to build and expand their business. If you’re strapped for cash in the early days of your venture, leasing property and equipment might be the best option.

It’s important to create a contract that clearly outlines the expectations and obligations of all parties. If you are asked to sign an existing property or equipment contract, having a trusted legal advisor review the document is important.

Be careful about signing contracts without a full understanding of all the provisions held within.

Employment Contracts

Employment contracts are the best way to ensure the individuals you hire sign on with a complete understanding of what is expected of them.

These contracts also protect workers and having them in place lets your targeted job prospects know that they are valued and will be taken care of.

When it comes to employment contracts, wording matters. The language must be clear and the order in which the provisions are set out must make sense. The last thing you want to do is give the impression that you are trying to pull a fast one on a new employee.

Indemnity Agreement

This is a contract that states that if an injury or other harm comes from the relationship between parties, neither side will hold the other responsible for damages.

A good example of an indemnity contract is a document that pet owners sign when they drop off a beloved dog or cat for boarding.

The indemnity agreement, in this case, would state that while every effort will be taken to avoid injury to the animal, the owners agree to hold the kennel harmless in the event an unexpected issue arises that harms a pet.

What Happens When the Terms Within a Business Contract Are Not Followed?

Even the most carefully drafted business contract cannot prevent occasional issues. What a great contract can do is make sure the business owner is not placed in financial or legal harm due to a breach of contract.

If an issue arises, the best way to handle things is to try and work the matter out with the other party. Of course, not all conflicts can be resolved in this manner.

A solid business contract allows business owners to move forward in the knowledge that they are protected under law. If the issue eventually reached court, the contract would play a central role in determining the outcome of the matter.

What Is “Adequate Consideration” and Why Is It Important?

Adequate consideration is the legal term that describes the aspect of a contract that holds some value for the party completing the provisions laid out within.

For example, in a contract between a homeowner and a tree removal company, the payment is the adequate consideration in an agreement about the removal of dead trees from a property.

What Are the Next Steps in Creating High-Quality Business Contracts?

Once you understand the importance of creating top-quality business contracts, the best step forward is to find a solid Houston Contract Attorney to assist you in the process.

This should be a professional relationship that is established on a foundation of trust because most business owners will need to create additional contracts as their business grows and expands.

Conclusion

Take the time to find a law firm that shares your values and is willing to put in the time it takes to get to know you and your business. That investment will truly pay off in the years to come.

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