A Business Contract is an agreement which is made between any two organizations, parties with mutual consent after their decision or agreement to enter in business relationship with one another. This contract is in other words a legal enforceable promise to abide one another for mutual sharing of the profits and losses in accordance with the already decided or signed obligations. The use of the business contract while entering in some new business relationships as it ensures any sort of the damages that may come across while dealing with a new or stranger firm. In case the contract is over ruled, this may result in a lawsuit, or legal act against the person responsible to breach the law.
The business contracts can be;
Oral business contracts:
When the terms and conditions are orally discussed between the two parties and there is no consent in written form. Such contracts are also very effective but on the other hand such cases may misinterpret some legal aspects and also such contracts are difficult to prove in the courts.
Written business contract:
Such business contract in which the terms and conditions are laid down in written form with signatures of both the parties is called as written business contract. This is easier to handle and proper record of everything is made on behalf of both the parties.
Here is preview of this Business Contract Template created using MS Word,
Essential elements of a Business Contract:
The essential elements of a successful contract are given as;
- The name and details of the parties which are willing to enter in this business contract.
- The date and time of the day when the contract is being signed between the mentioned parties along with the description of the place of contract as well.
- The nature and complete account of the business activities which will be shared among these two parties. The description should enlist each and every single detail of the mutually shared activities.
- Any sort of the information or the business knowledge or technology shared between the two, and the status of the confidentiality of that information.
- The payment clauses between the two parties should be clearly indicated.
- Any sort of other obligations or terms and conditions which the two parties want each other to oblige.
- The terms and conditions for the profits and losses along with the relevant calculation formulae.
- The time period for which the contract will be duly effective between the two organizations.
- The compensations in case of breach of the contract imposed by one party on the other one.
- The legal restriction of the business relations and obligatory instructions for the use of these relations within certain limits.
- The court or jurisdiction to be contacted in case of any lawsuit.
Use of the Business Contract:
- This contract is helpful while hiring a vendor, contractor or while reviewing the services and business options.
- This is used while selling a business.
- To enter in joint partnerships
- Important for signing some sort of confidentiality agreements
- Important for entering in some lending and borrowing needs
Here is download link for this Business Contract Template,
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