You’re not legally obligated to hire an attorney when creating a business contract. If the agreement meets the requirements that make a contract legally binding and each party consents to the terms and signs it of their own free will, it should be legally enforceable.
However, business contracts are binding agreements that protect each party’s rights and outline their duties and obligations. You should consider hiring a lawyer to assist you in defining the terms, avoiding confusing language, and preventing complications that can allow someone to challenge the contract.
Requirements of a Valid Business Contract
A contract is an agreement or promise between the parties involved. Two or more people in professional relationships sign business contracts to define their agreed-upon roles, rights, and responsibilities clearly.
A contract must contain multiple elements for a court to consider it legally enforceable, including:
- The contract must include an offer and an acceptance of the offer. An example of this offer and acceptance could be a job applicant who accepts an offer of work from an employer.
- There must be consideration. That means each party to the contract must exchange something of value with the other party. For example, a tenant pays money for the right to occupy an apartment they rent from a landlord.
- Every party who signs the contract must consent to the terms and have the legal competence to understand their actions. In other words, someone with severe cognitive impairments or under 18 can’t legally enter into a contract.
- The contract must involve a legal activity. The court will deem the contract invalid if it involves unlawful acts such as sharing the profits of a robbery with another person.
Common Types of Business Contracts
Business contract attorneys have the experience and knowledge to establish an ironclad contract that meets your needs. Although you don’t have to hire a lawyer, you should.
Entering into a legally binding agreement isn’t something you should take lightly. Signing a document without fully comprehending the terms or your rights is dangerous. It can lead to significant unintended consequences and time-consuming legal battles.
A business contract attorney can assist you in preparing various types of contracts depending on your circumstances, including:
- Dissolution agreements – A dissolution agreement can legally nullify or dissolve an already executed contract.
- Sale and purchase agreements – A sale and purchase agreement establishes the conditions and terms of a real estate transaction.
- Franchise agreements – A franchisee can enter into a franchise agreement with a franchisor for the right to sell, operate, or distribute the products associated with the franchise.
- Manufacturing contracts – A manufacturer that makes products for another corporation and obtains the materials needed to make those products requires manufacturing contracts for those transactions.
- Partnership contracts – A partnership contract allows two or more business owners to determine who is responsible for operational tasks.
- Distributor contracts – A supplier with products to sell can execute a distributor contract with another company to allow them to distribute the products.
- Buy-sell agreements – A buy-sell agreement determines how to reassign a partner’s business shares under specific circumstances, such as death.
- Vendor agreements – A vendor agreement forms a business relationship between two parties when one party has goods or services that the other party wants to acquire.
- Employment contracts – An employer and employee sign an employment contract to outline each party’s rights and duties.
- Property agreements – A property agreement includes a pledge or security offering specific property in exchange for the other party performing an obligation or paying a debt.
- Company operating agreements – The owner of a company formed as a limited liability company (LLC) can use a company operating agreement to outline financial and functional regulations, provisions, and rules.
- Service contracts – A service contract sets the conditions and terms between a hiring entity and the contractor performing work.
- Shareholder agreements – A shareholder agreement regulates relationships between a corporation and its shareholders.
- Releases and waivers – A release and waiver is a promise by one party not to take legal action against the other while releasing the other party from liability.
- Vendor and independent contractor agreements – A vendor or contractor and their paying client use a vendor and independent contractor agreement to outline the terms and conditions of the working relationship.
- Lease agreements – Lease agreements include the terms a renter and landlord agree to when the tenant rents property from the owner.
- Non-compete agreements – A non-compete agreement prevents an employee from working for their employer’s competitor for a specified period after their employment ends.
Get Help with Your Business Contract
If you need to draft a business contract, contact a Cedar Rapids contract preparation attorney from Arenson Law Group, PC immediately. With over three decades of legal experience, our legal team can establish a contract that fosters a positive business relationship and protects your interests.
Call Arenson Law Group, PC at (319) 363-8199 for a confidential consultation today.