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Contracts are a key part of business operations and can concern a company’s relationships with its employees, contractors, service providers, and business partners. A business owner should familiarize themselves with the most critical types of contracts their company will likely need.
Employment Contracts
Businesses may have written employment agreements with their employees, which define the terms of the employment relationship. An employment contract can make employment at-will, allowing the employer to terminate the employee at any time for any reason not prohibited by law or establish the specific grounds on which the employer may terminate the employee. Employment contracts also include other key terms, such as:
- The employee’s title and job duties
- Compensation
- Benefits, including health/dental/vision/life insurance, retirement benefits, PTO, and other fringe benefits
- Restrictive covenants like non-disclosure or non-compete provisions
Independent Contractor Agreements
Some businesses may hire workers as independent contractors rather than employees, including when the worker provides a specialized skillset outside the ordinary scope of the business’s operations. Independent contractors typically work for businesses on a temporary or per-project basis and have a vastly different relationship with the business than an employee would. For example, businesses may pay independent contractors on a per-project or milestone basis, although some contractors may get paid an hourly rate like an employee would. Furthermore, businesses do not pay payroll taxes for independent contractors and do not have to extend benefits such as health insurance or retirement contributions.
Partnership Agreements
Business partners may have a partnership agreement or another type of governance document, like an operating agreement for a limited liability company or a stockholder’s agreement for a corporation, which outlines the partners’ rights and duties to each other and the business. Partnership agreements can address a myriad of issues, including partners’ roles and responsibilities, capital contribution obligations, profit-sharing, and dispute resolution.
Non-Disclosure Agreements
Businesses that must disclose confidential or sensitive information during a transaction may enter non-disclosure agreements (NDAs). These agreements obligate the party receiving the sensitive information not to disclose that information to third parties or use that information except as permitted by the NDA. An NDA should define what constitutes confidential information and establish a timeframe during which the receiving party must keep the information confidential. Businesses frequently use NDAs when negotiating mergers, acquisitions, and licensing agreements.
Master Services Agreements
A business that receives ongoing services or goods from an outside vendor may enter a master services agreement with the vendor. An MSA provides the legal framework for the parties’ business relationship, including establishing payment terms, the process for placing orders, delivery deadlines, and renewal/termination rules. Parties may have one or more sub-agreements under an MSA, such as a purchase order, statement of work, or change order.
Purchase Agreements
A business making a one-time purchase of goods or services may enter a purchase agreement with the supplier to document key terms like price, the specific goods/services ordered, payment terms, and delivery deadlines.
Lease Agreements
Companies who lease real estate or equipment will have lease agreements with the property/equipment owner. A lease agreement should contain key terms such as:
- Duration of the lease
- Payment terms
- Maintenance responsibilities
- Financial responsibilities for taxes, utilities, etc.
- Renewal or termination rights
- Lease-to-own options
Intellectual Property Agreements
Businesses may have various intellectual property agreements with employees, contractors, and other businesses. Common types of IP agreements include invention assignment agreements, under which an employee or contractor agrees to assign their IP rights in any work created within the scope of work performed for the business. A company may also enter a licensing agreement to license their intellectual party to another business or license IP rights for the company to use.
Contact Our New York & Florida Contracts Attorney Today
An experienced contracts attorney from the Law Office of Angela Siegel can help you negotiate and execute the critical contracts needed for your company’s operations. Contact us today for an initial consultation to learn more about the essential contracts your business may need.
At the Law Office of Angela Siegel, we are pleased to offer legal assistance to clients in Nassau and Suffolk Counties, including Garden City, Jericho, East Meadow, Mineola, Syosset, Roslyn, Cedarhurst, Melville, Huntington, Smithtown, Plainview, Merrick, Wantagh, Rockville Centre, West Hempstead, Little Neck, Douglaston, and Bayside. We also serve clients in the boroughs of Manhattan, Queens, and Brooklyn, as well as those located in the state of Florida.