It is likely that you have made quite a few agreements with other people in your life. It could be as simple as making a deal with your classmates when you were a child. You have reached an agreement and then acted upon it. In business, agreements are very important and thorough examination must be done when making one.
If you are looking for sample agreements that you can use , then you have come to the right place. Our sample agreements have all the right elements that make a good agreement document. They are also very easy to use and customize so making it your own should not be a problem.
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What Is an Agreement?
An agreement is an understanding or a meeting of the minds of two or more parties. When entering an agreement, these parties have obligations to each other that they must comply with. An agreement may or may not be put into writing. It could be an oral agreement in which the negotiation process was only done through both parties speaking with each other. It could also be a written agreement in which all the arrangements that the parties have agreed with are placed in a document, which now serves as proof that a promise has been made.
Almost anyone can make agreements about basically anything. People make agreements all the time with other people. When an agreement is legally binding, all the parties involved need to obey the stipulation in the document. This is why it is important to get agreements into writing because you now hold proof of the negotiation. While oral agreements are also recognized by law, they are rarely legally binding so proving it is harder.
When making an agreement, detail is key. You need to be clear of all the things that you really need so that there is no room for misunderstandings and disputes. Below are some of the things where you need to provide details:
- Actions. Be as detailed about the actions that each party needs to do.
- Time frame. Clearly state when the stated action will need to be done.
- Other relevant details. You may need other specifications on the transaction you will do so make sure to include them.
Agreements Versus Contracts
Agreements are often confused with contracts. People often use these two words interchangeably. However, these two are somewhat different entities. A contract is a form of agreement. This means that while all contracts are agreements, not all agreements are contracts. An agreement needs to contain all the essential elements for it to be considered a contract. For reference, you can check out these sample contracts and compare it with these sample agreements . Listed below are the differences you would see between the two:
- Validity. The validity of these two is based on mutual acceptance of all stipulations by all the parties involved. There are however certain components that should be found in a contract before it can be considered valid, at least legally.
- In writing. Agreements do not have to be in writing. They can be oral agreements between the parties involved. Contracts also do not need to be in writing but some contracts, such as those that involve land, need to be put into writing and be registered.
- Scope. An agreement covers a wider scope because it encompasses all types, including contracts. Contracts, on the other hand, have a narrower scope as they only cover those agreements that can be enforced by law.
- Legal effect. When an agreement does not have the elements that make it a contract, it does not have any legal effect. A contract however, is legally binding and enforceable in a court of law.
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What Makes a Good Agreement?
It is not easy to make an agreement. You are dealing with another person or maybe even a whole organization and you need to come up with a consensus on what each party will need to do. You are not only considering what you want and need but also that of the other party. That is why you would need to make an agreement that is effective in making every party involved satisfied. Here are some of the qualities that make a good agreement:
- A good agreement is fair. All parties involved in the agreement need to feel like they are getting a fair share of what is at stake in the negotiation. The terms that are stated should also be reasonable enough for all people involved.
- A good agreement is balanced. All parties need to play a role in the implementation of the agreement. It should not be that one party gets to have a bigger stake as opposed to the other ones.
- A good agreement is realistic. The stipulations that you include in your agreement need to be pass careful evaluation based on the time and resources of the parties involved. Make sure they are achievable.
- A good agreement is specific. As previously stated, detail is key in any form of agreements. You need to be as specific with the details that you provide to avoid confusion.
- A good agreement is future-oriented. The agreement needs to readily address any possible disputes that might arise in the future.
Key Components of an Agreement
There are different kinds of agreements that you can find out there. For example, there are non-disclosure agreements, lease agreements, purchase agreements, and so on. Because of the varied nature and industries in which these agreements are done, there are different entries that will be found in them. However, there are certain key components that every agreement needs to have and they are listed below:
- Parties involved. To make an agreement, there needs to be at least two parties involved. Clearly state the name of the parties that are involved in the agreement.
- Agreement. This is a general statement of the agreement and should be kept at one or two sentences.
- Terms. This is where the full details of the agreement are stated. The terms of payment and a non-compliance clause are also often included here.
- Signatures and date. When the parties agree to everything in the document, they need to sign it and put the date.
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Dos and Don’ts of Making an Agreement
When making an agreement, it is important to get everything right so there would be no problems that would arise from it. Especially when the agreement is legally binding, you do not want to have any problems with the law. We all know lawsuits could get ugly. You do not want to sign a legally binding agreement only to find out there are loopholes in it. You need to make the document as airtight as possible so you do not get into trouble.
There are guidelines when making an agreement. There are also certain information that need to be present in them so that they are effective in doing their job. We get that making an agreement is not easy and so we have compiled these guidelines that you can use when making one of your own:
- Do get it into writing. Oral agreements may be recognized by law. However, they are rarely enforceable by law so make sure to put your documents into writing.
- Don’t use vague or ambiguous words. Do not use words that would confuse the parties involved. It is not good practice as the aim of the agreement is to reach an understanding. For example, the word “net” means after all charges are deducted from it. It could also mean a real net that is used to catch things or as container. “Material” is also considered a very vague word that could mean a lot of things.
- Do define technical terms. There are bound to be technical terms in an agreement no matter how much you stay away from jargon. Be sure that you define these terms first so that both parties are clear as to the meaning of these words.
- Do be as detailed as possible. You need to provide all the necessary details so that there are no disputes when the time arises. Misunderstandings happen when exact details are not provided so make sure you provide as much details as possible.
- Don’t agree to a contract modification without putting it into writing. Any changes or revisions need to be put into writing. The changes also has to be agreed upon by all the parties involved before it is finalized and put into writing.
- Do include termination terms and non-compliance clauses. There may be misunderstandings along the way so make sure you clearly state what constitutes a termination of the agreement or what to do when other parties do not comply with the stipulations.
Making an agreement is not an easy task, as there are guidelines and directions that need to be followed. Just like any documents such as resumes and cover letters, careful thought needs to be put in making one. Our sample agreements are done with the goal of a good negotiation in mind so it contains all the elements of a good agreement form.
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