While verbal contracts are considered valid and do hold weight, it relies entirely on good faith between both parties. It is absolutely advisable that all types of agreement be put in writing, especially contracts involved in business, as verbal contracts can be very difficult to prove. Having a written contract is a security measure that could protect you should there be trouble ahead.
When drafting and signing a business agreement, there are some legal guidelines that must be followed to ensure that the contract is considered binding in the eyes of the law. Download these Sample Agreements that you could use as reference for the necessary elements a business agreement must contain.
Business Agreement between Two Parties Template
Business Contract Agreement
General Business Agreement
Consultancy Business Agreement Between Two Parties
When to Draft a Business Agreement
In short, every time.
Even if the person you are entering into a business agreement is your best friend, it is still highly recommended that all agreements or business decisions be put into writing. In fact, it is best that while you both are chummy, an agreement be drafted and signed in case you reach some sort of disagreement in the future.
Check out these Sample Business Agreement Contracts to download and use as a guideline for come time when you draft your own. Draft an agreement when
borrowing or letting someone borrow money;
renting or letting someone rent properties;
supplying or purchasing goods and services; or
entering into a partnership, collaboration, or a joint venture with someone.
Validity of a Contract
There are contracts that will be deemed null and void since the beginning, thus, the breach of it will not hold the parties accountable nor liable. A contract is considered invalid and unenforceable if it
- is agreed upon through misleading or deceptive conduct;
- is entered into by someone who lacks the capacity to make a sound decision such as a minor, someone mentally incapacitated, or someone who was intoxicated during the time the contract was agreed upon;
- the provisions of the contract are criminal or against the law to begin with; and
- the provisions of the contract are clearly unfair.
Simple Business Agreement Between Two Parties
Confidential Disclosure Business Agreement Between Two Parties
Partnership Business Agreement
Drafting a Business Agreement
- Clear and simple is always better. Contrary to what many may think, unnecessary jargon does not make a contract more enforceable than a contract that is direct and clear with its provisions. If anything, the latter is more preferable as it makes negotiations faster and easier for the parties involved.
- Identify the parties correctly. When entering into a business agreement with a company, make sure that the correct and complete legal names of those involved are in the contract. The name that appears in the company’s business permit should be written in the contract, not the names of those signing the agreement.
- Be explicit with the details. Be specific with what exactly is expected from the parties. If you forgot to include something, you can just handwrite it in, and if both parties sign their initials on the amendment, it is considered a part of the contract.
- Make sure to include how and when an agreement can be terminated. Make sure it is also explicit in your business agreement that should the parties decide to part ways, who is to get what. Include what should be done should a breach of the contract be terminated or how long you wish for the contract to be enforceable.
See these Sample Business Purchase Agreement for more business agreements.
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