Susan Paul – Business depends on striking agreements with others. While it’s true that many of the deals you reach will still have legal force even if you never commit them to writing, mere verbal understandings can easily be misunderstood, misremembered and argued over in times to come. That’s why many agreements are best set out on the page. Here are a few situations when written agreements are particularly worth thinking about.
Sales and Service Agreements
Sales agreements set out the terms of a sale of goods – the price, manner of delivery, etc. Of course, you might not need a written contract if you’re selling lemonade from a stall, but for anything more expensive or complicated you’ll want to make sure the terms are clear. And in ongoing business relationships it might surprise you how often parties can view the situation differently – for example, you may be ordering goods weekly on the understanding that you’d confirm if you needed them each week, while your supplier may think you’ve committed to regular deliveries.
Written agreements can often be even more important when services are being sold, as there is frequently more room for the scope of the service to be interpreted differently on each side. If you’ve agreed, for example, to create a website for a company, you’ll want to be absolutely clear that this doesn’t include coming back to fix every routine running issue they have over the next year.
One of the most types of important agreement you’ll need to make is with your workers. While you hope it won’t happen at the time you take an employee on, disputes can often arise further down the line, and it’s always best if the employee’s responsibilities, salary, holiday entitlements and any commission arrangements are set out in advance.
Intellectual Property and Confidentiality
If patents, trademarks and copyright are relevant for your business, you’ll need to set out who owns the rights over your business’ output. If one of your employees comes up with a new invention while working for you, you don’t want them taking it elsewhere – likewise, if they produce a great article or marketing tagline.
Agreements in the form of Non-Disclosure Agreements (NDAs) can also be used to protect confidential information. Investors may require that these agreements are in place before working with you.
Website Usage Agreements
Corporate law in different jurisdictions can require various matters to be put in writing. Even notes of meetings are often important to ensure directors can show they have met when required, that shareholders can be notified accordingly, and that there is a record of issues discussed.
So how do I go about it?
Of course, while most businesses will probably use writing for something like a complex lease over a large property, this list covers some of the times businesses most often miss out the paperwork. Sometimes, you may feel rude insisting on a written agreement, or you may feel it’s too much effort.
However, there are companies, such as Prosperolegal, that offer business contract templates for many situations that will cut the time spent drafting. And introducing routine written agreements can save a lot of trouble in the long run. If other parties avoid writing, you may ultimately be better taking your business elsewhere!