A contract is a written legal agreement defining rights and obligations of the parties concerned.

  • A contract is the best form of defense and protection a company can have when dealing with other parties: suppliers, clients, and business partners.

    It’s especially vital when the business is conducted in a foreign country where different regulations exist and there is a higher risk of misunderstanding.

    A contract protects against the risks that come with the “handshake” agreements, such as changes in terms or simple misunderstandings.

  • In the Internet age, it’s common to turn to standard contracts found online. This is a risky practice as well, since it’s very difficult to ascertain the quality of Internet sources.

    A legal consultant can draw up a contract tailored to the needs and objectives of the company, making sure the business’s interests are protected.

  • Companies can sign different forms of contracts. Below are the most common ones.

    Joint venture agreements (JVs): (temporary partnerships of enterprises) a contract that enables two or more companies to partner up on the implementation of a project. The establishment of a joint venture can result (though not necessarily) in the constitution of a new legal entity, separate from the companies that generated it.

    Cross-border transaction: it’s a commercial or financial transaction that involves parties in different countries with different legal structures.

    Merger and acquisitions: a business arrangement involving acquiring one company from another company. When a company is incorporated by another company, a merger by acquisition is in place. In some cases, the merger may result in a brand-new entity.

    Legal due diligence: deals with the research and analysis of economic, financial and legal data in order to determine whether the operation meets the conditions to be viable. The objective is to evaluate the viability of a business and to identify risks and problems, both to negotiate terms and conditions and to establish appropriate measures for guarantees, indemnity and compensation.

    Partnership agreement: a written agreement between two or more parties to do business together, in which they establish each other’s obligations and responsibilities.

    Share holder agreement: an arrangement among a company’s shareholders that outlines how the company should be operated and the shareholders’ rights and obligations. It also includes information about how the shareholders’ relationship is regulated, the company’s management, the ownership of shares and the privileges and protection of shareholders.

    Agency agreement: it’s an agreement among people and/or organizations whereby one, (the agent), acts on behalf of the other, (the principal). This agreement states the functions the agent will perform for the principal, under what circumstances, and for what compensation.

    Distribution agreement: an agreement determining terms, obligations and rights between partners of a distribution channel. It can be signed between a manufacturer or a seller and a distributor, between two distributors, or between a distributor and another entity.

    Consignment agreement: an agreement between a consignee and a consignor for the storage, transfer, sale or resale and use of the commodity. The agreement also determines on what terms the consignee may take goods from the stock for use or resale.

    Trust agreement: it’s a legal arrangement through which one or more people, called trustors, transfer goods and rights to the trustee, who is appointed with the duty of administering the trust in the interest of one or more beneficiaries or for a specific purpose.

    Non-Disclosure Agreements (NDA’s): an agreement where the contracting party agrees not to divulge information that is treated as confidential.

What type of contract do you need?