Types of Agreement

Agreement are part of normal business operations and others are meant to protect the business from unfavorable legal situations. Some familiar agreements are partnership agreements, indemnity agreements, non-disclosure agreements, lease agreements, and vendor agreements.

Common Business Agreements:

Business Agreements come in different varieties and every type of agreement looks similar at first instance but agreement differs in terms of clauses and terms & conditions.

General business agreements, for example, are the contracts that cover the most vital topics related to your business, including the structure of your organization and the protections available to your shareholders. These are:

1. Partnership deeds
2. Equipment Lease
3. Franchise agreements
4. Employment contracts

Another category of business is sales related for which different other contracts are required. These agreements make the transfer of title when needed. There are several types of sale-related contracts:

1. Purchase Order is when your company needs to purchase a certain item
2. A security Agreement is needed when you need to put an asset as a collateral
3. Warranty document that describes actions that would result in the contract being terminated

Employment contracts are the other category of business contracts. These are important for hiring employees for your organization and can protect both your company and your employees.

A general employment contract defines your relationship with your employee:

1. Tenure of employment
2. Compensation of employee
3. Bonus schemes
4. Terminating the employee

When an employee is hired, the employee shall be bound by certain obligations which are mentioned in the Agreement.

Agreements shall include:

1. Independent Contract Agreements
2. Consultation Agreement
3. Distribution Agreements
4. Confidentiality Agreements

Gentleman’s Agreement:

A Memorandum of Understanding is also called a gentleman’s agreement as it is not a legally binding agreement. It defines the relationship between the parties including the objective of the partnership.

Importance:

Agreements are necessary to protect information and make the respective aware of their rights & obligations. Furthermore, it is the shield for employees and employers where either Party fails to honor its own contractual obligations. We must understand the need for contracts in today’s modern world of business. 

The only evidence of details:

Agreements are executed primarily to record details that both parties have agreed upon the terms & conditions. This specific information provides clarity over expectations including the monetary ones. The details provided in a contract will serve as evidence that a specific claim is legitimate.

Prevents Misunderstanding:

Every business requires to follow some rules & regulations to avoid certain situations. The business may be affected by it since breaching the contract rules can cause conflict between the parties and thus have a negative impact on the business. This is why contracts are crucial for businesses.

Ensures Safety:

Parties are secured as it specifies the tenure of the contract along with the responsibilities of the Parties. Employees and employers are legally responsible for performing their duties. Contracts are thereby extremely important. During times of a breach of agreement, either Party can file a complaint against the other as proof.

Assures Confidentiality:

A contract contains a confidentiality clause or a separate non-disclosure agreement (NDA) which acts as protection of confidential information of the respective parties. The parties to the Agreement are not permitted to reveal the details of their business transactions or monetary transactions to anyone else. 

Lead India helps you register the type of company as per your desire and guides you through the process and required documents.