9 Contracts You May Need for Your New Business

Whether you’re planning to launch the next great tech startup or you want to open a small store in your hometown, contracts are a critical consideration. For every business type, contracts provide legal and financial protection.

Understanding which contracts are essential for your business can help you create a strong legal foundation for your endeavor. Reaching out to an experienced business law team to discuss business formation and contract needs before you start your company can be a good idea. A business lawyer can help you understand which of the following contracts are important for your company and whether you need additional documents.

1. Employment Contracts

If you plan to hire anyone to work for your startup, you need an employment agreement or contract. Employment contracts let you clearly define what you expect from an employee and how you will compensate them.

Having these agreements in writing can reduce misunderstandings that lead to employee morale issues and potential legal battles. Employment contracts can also provide some protections for your business assets and detail a path for resolving disagreements or terminating the employee/employer relationship.

2. Non-disclosure Agreements (NDAs)

Also called confidentiality agreements, NDAs are contracts that spell out what information one or more parties agree to keep confidential. NDAs can be useful in protecting trade secrets and intellectual property and managing your employer and business brand.

Often, NDAs are included as clauses or additions to other types of contracts, such as employment and partnership agreements.

3. Leases

Lease agreements can be relevant to real estate property, such as office space, storefronts, or residential homes. They’re also common when dealing with vehicles and equipment that are leased rather than sold.

Depending on the nature of your startup, you may need to sign lease agreements when leasing property or equipment from others. Or, you might have property or equipment to lease to your own customers. In either case, an experienced review of the lease document can help protect your interests and reduce potential future hassle.

4. Sales Contracts

You don’t need a sales contract for every type of sale you make—no one is signing a sales agreement for their takeout hamburger or the blouse they purchased at a local clothing boutique. However, a sales contract can help protect you and your customer if you’re dealing with more complicated or larger-value items.

These contracts detail information such as the price of the goods, how payment will be made, what rights the customer has regarding returns and similar matters, and any additional value the company is responsible for providing. Some examples of sales contract use cases include vehicle sales, the sale of software or cloud computing solutions, and furniture sales that involve delivery and other considerations.

5. Service Contracts

Also called service agreements, these contracts govern how services are provided to customers who purchase them. They may detail information such as the price of services, when and how services are provided, and what options customers have if they aren’t satisfied with the services. Good service contracts offer protection for you as the provider as well as your customer.

Some examples of industries where service contracts are prevalent include field services (such as HVAC and plumbing), software as a service (SaaS), healthcare, legal, banking, and any time an installation might occur (such as home security or roofing).

6. Partnership Agreements

If you are launching your startup with one or more partners, it’s essential to set your agreement in writing. Partnership agreements can be complex and unique in each scenario, so it’s important to consult a business law attorney to ensure yours is comprehensive and protects your interests.

7. Joint Venture Agreements

These types of agreements occur when two businesses partner on a specific effort. One use case for joint venture agreements is when two or more smaller businesses want to combine efforts so they can win government contracts. You might also use this type of agreement if you want to join forces with another entrepreneur to launch a new product or engage in research and development efforts that might be beneficial to both of your startups.

8. Intellectual Property Agreements

In some cases, you may need contracts that spell out the ownership of intellectual property rights. For example, if your business involves creating graphic designs for clients, who owns those designs? Do the employees who make the designs have any rights to them, and how do you transfer IP rights to clients who purchase these services? Your intellectual property agreement should spell out these types of details.

9. Indemnity Agreement

This type of contract is also sometimes called a hold harmless agreement. It is a protective contract—or a clause in a larger agreement—that says the other party won’t hold you liable for certain types of damage that occur in the course of your relationship.

Indemnity agreements are commonly included, in some form, in service and sales contracts. They’re very common in industries such as construction, pet care, healthcare, fitness, and equipment or property rental.

Work With an Experienced Business Law Team to Shore Up Your Contracts

This is not an exhaustive list of contracts you might need for your startup, but it does provide a glimpse at the many legal considerations involved in launching and running a business.

To find out more about what contracts you might need—and to get help creating those contracts—call InPrime Legal today at 770-282-8967 to schedule some time with our team.