Common Business Contracts

Business owners use a lot of contracts. A valid contract is a legal contract including an offer, acceptance, and consideration. Owners often use a variety of contracts, depending on their business needs. This page lists the most common types of business contracts below. There are also links to helpful pages about the contracts.

To see common contracts, look at FindLaw's collection of well-known corporations' real business contracts. Other types of business contracts include license agreements, purchase orders, and service contracts.

See FindLaw's Contract Law and Drafting Contracts sections for more information.

Sales-Related Contracts

Sales contracts relate to the ownership of tangible goods and services. Most small business contracts are sales contracts.

• Agreement for the Sale of Goods: A contract for tangible goods. A bill of sale may confirm the transaction.
• Bill of Sale: Transfers ownership of goods from one party to another.
• Limited Warranty: Warranty limited to one or a few parts.
• Surety Contract: Contract between a lender and borrower of a loan. A surety may include third-party security for the loan if the borrower fails to pay.
• Warranty: A promise that the product sold works as represented or replaces the product if it fails.

Employment-Related Contracts

Employment contracts include everything related to the employer-employee relationship. This can include employment offer letters, benefits packages, and retirement plans.

• Employment Agreement: A contract for employment, including details about payment, job responsibilities, etc.
• Employment Noncompete Agreement: An agreement not to compete with the employer. It may be for a set time or in a certain area.
• Employment Separation Agreement: Also referred to as a termination agreement. This ends the employment relationship.
• Independent Contractor Agreement: Like an employment agreement. It outlines the terms for an independent contractor.
• Nondisclosure Agreement: Agreement to not disclose confidential information to third parties. Also called a confidentiality agreement or NDA.
• Reciprocal NDA: Both parties agree not to disclose certain trade secrets or proprietary information.
• Sales Representative Agreement: Used to define a salesperson's commission and how it's tabulated.

Leases

There are two basic types of business leases. Franchise agreements are not considered leases, although some legal issues overlap. Franchisees may have to lease their equipment from the corporate entity. They may be responsible for the property lease or purchase.

• Equipment Lease: Agreement to lease equipment for a specified time.
• Real Property Lease: A property or real estate rental contract between the landlord and the business.

General Business Contracts

Business contracts cover the entire scope of doing business. Small business owners must write legal documents for everything they do. Smart entrepreneurs will have a good relationship with a business attorney to protect their legal rights.

• Advertising Agency Agreement: Establishes the business relationship between the owner and the ad agency.
• Agreement to Sell Business: Documents the terms of a business sale.
• Assignment of Contract: A legal transfer of the benefits and obligations of a contract from one party to another.
• Covenant Not to Sue: One party claiming damages agrees not to sue the responsible party.
• Franchise Agreement: Outlines the relationship between the franchisor and the franchisee.
• Indemnity Agreement: An agreement to transfer legal or insurance risk from one party to another.
• Joint Venture Agreement: Lays out the duties of all parties involved in a joint venture.
• Partnership Agreement: Official agreement among two or partners, including their individual responsibilities.
• Release: Often a release of liability in sports-related businesses. Also called a disclaimer.
• Settlement Agreement: Agreement between two parties to end a lawsuit in exchange for payment of damages.
• Stock Purchase Agreement: Contractual agreement to sell a certain amount of stock to a named individual. Used for stock options at privately held companies.

Do You Understand the Fine Print? Make Sure by Calling a Lawyer

Small businesses have many contracts to deal with. Online templates are available, but you still need to protect your legal rights. It's always better to have an attorney review your contracts to ensure you have a legal contract before signing anything. Meet with a small business attorney with contract experience. They can break down the terms, help you make the best decision, and avoid costly mistakes.