Contracts should always be in writing to avoid misunderstandings between the parties and ensure that the terms can be fully enforced. The types of contracts that may be needed by a business vary based on the industry, size, and other factors. Examples of common agreements include:
Businesses may lease building space as well as equipment, both of which can be a significant expense. Leases set terms and conditions for a given piece of property; including monthly payments, maintenance agreements, deposits, term, and other items. Since these contracts generally last for years, it is essential to negotiate favorable terms. Tenants or lessees sometimes assume that leases are standard documents that cannot be changed, but that is not true in many instances. You may be able to substantially reduce your costs and/or gain more flexibility in your use of the space.
Service agreements are used when one party (the service provider or vendor) provides a service to another for monetary compensation. The agreement usually has two parts: the statement of work, and the terms and conditions. The statement of work may outline the monetary compensation, timeline for payment, type of services provided, timeframe to render the services, and other provisions. The terms and conditions outline the ancillary stipulations of the parties, such as intellectual property ownership, non-disclosure, non-solicitation, indemnification, choice of law, and other provisions used to safeguard the company’s confidential information and address dispute resolution matters.
A licensing agreement is a contract between an owner of rights (“licensor”) and someone who wants permission to use those rights (“licensee”) for certain designated purposes. When licensing intellectual property, the key issues include the scope of rights granted, payment structure, representations and warranties, and indemnification. In the case of a Software as a Service (SaaS) agreement, there are additional concerns such as data security and privacy, performance obligations, ownership of intellectual property, and limitations on liability. Regardless of which side you are on, an attorney should always review the agreement to safeguard your interests.
Are your business contracts protecting your interests?
If you are a business owner, you know that business agreements come in many shapes and sizes; but there are underlying principles you should keep in mind for each agreement, no matter the type. Reach out today to ensure your business contracts are valid, enforceable and appropriate for the type of business you are conducting.