What is a business agreement

A business agreement means a deal or a contract which refers to a business transaction, in other words, a legally binding document signed by two or more parties for an exchange of services and payment for those goods or services. A business agreement is prepared by firms lay out the terms and conditions clearly and to make sure that there is no breach of contract.

A business agreement must include the following items:

  • Date of agreement: Every agreement has a starting date and an ending date which is referred to as the term of the contact.
  • Names: A business agreement must include the names of the companies along with their representatives who are signing the agreement.
  • Terms and conditions: This refers to all the rules that the parties signing the deal agree to, besides mentioning details of what products or services is offered, how much money is to be paid etc.
  • Payment details: Besides giving the payment amount, it must also mention how and when the payment will be made.
  • Termination clause: This refers to any situation in which the business agreement will be nullified along with damages for breach of contract.
  • Signature: The business contract must end with the signature of both parties.

There are certain tips one can follow to make an effective business agreement.

  • Be precise: Instead of using difficult legal jargon, the terms of an agreement must be described in a concise, specific and clear manner.
  • Legal knowledge: It is helpful if one is knowledgable about the legal issues associated with the deal and familiar with laws related to the business agreement.
  • Careful proofreading: There are many points mentioned in an agreement in the fine print which one may miss if the whole agreement is not read carefully, and that can create problems later.

Category: Sample Agreements

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