Every business uses contracts. From the formation of the business through its operations, sales, and employee relationships, written business contracts make things happen. Contracts also prevent misunderstandings about your agreements. In keeping with our topic – business contracts – let’s look at three types of business contracts you might need as you form and operate a company.

Business Structure and Operations

The type of contracts you need depends greatly on the type of business entity you have formed. For example, a sole proprietorship may not require any contracts or agreements to form, since there are no business partners. However, a partnership starts with a partnership agreement. As a company grows, the business entity may change, and contracts likely will be involved.

Throughout normal business operations, a business owner may see some of the following contracts:

  • Professional contracts with advertising agencies, lawyers, certified public accountant firms.
  • Leases for commercial property or office space.
  • Licensing agreements to use proprietary information or intellectual property.
  • Sales agreements with vendors or clients.

This list is by no means complete. Any time a business owner negotiates an agreement, business contracts or agreements may be needed

Business Contracts for Sales

A well-drafted, written contract protects the buyer – and the seller. Some of the common sales-related business contracts are:

  • Purchase orders,
  • Bills of sale, and
  • Warranty agreements.

Here, again, the type of written agreement you need may depend very much on the company and the transaction involved.

Employment Contracts

Alabama is an “at-will” employment state. In practice, either the employer or employee can terminate employment at any time for any (or no) reason.

However, employers may require some employees to sign contracts related to their job, including:

  • Employment contracts that set out the terms of their employer-employee relationship.
  • Non-disclosure agreements that require the employee to keep company information confidential.
  • Non-compete agreements that may restrict the employee’s ability to jump to competitors or start competing companies.
  • Sales commission agreements that set forth how much the employee will be paid.

Alabama law contains specific language about employment contracts. Before handing an employee a contract, talk to a business lawyer.

Learn More About Business Contracts Your Business Might Need

It’s impossible to cover every aspect of business contracts in one article. State and federal laws may apply and, without legal advice, it’s too easy to make costly mistakes in written agreements.

Call Bruce Adams. He has the skills and experience to help with your business contracts and other business concerns. Please contact us at 256-237-3339 to set up an appointment or use the convenient Contact form on our website. Our office is located in Anniston, Alabama, but we assist clients in surrounding Calhoun, Cleburne, Etowah, and St. Clair Counties.

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