There are many different types of business contracts. What you need to include in a business contract depends largely on 5 factors. These factors are outlined below.
What is the purpose?
The first thing you need to consider is the purpose of the contract. Do you need a set of sales/services terms and conditions? Do you need a manufacturing agreement? Do you need an end user license? This generally depends on the nature of your business. If you are unsure of the type of business contract you need, you should speak to a business lawyer.
What are you providing?
A business contract is drafted based on the goods and/or services that you are providing. If you are offering a product for sale, then the contract will need to specify how orders can be placed for the products, what the prices are, and what rights the purchaser has if your products are faulty or damaged. On the other hand, if you are offering services to another party, the contract needs to set out what the services are, when they will provided, how the services can be terminated, and what rights and responsibilities each party has. If customers have a clear understanding of what exactly they will and will not receive under the contract, there will be less room for disputes and arguments.
What do you want in return?
If you provide a good or a service, you will want to be rightfully paid for those goods or services. To help ensure that you are paid correctly and on time, your contract should set out what the price for your goods and/or services are, when the purchaser is expected to pay you, and what the consequences are if they do not pay. In a professionally drafted contract that has been prepared by an experienced business lawyer, there will usually be a clause which gives you the right to charge interest and engage the assistance of debt collection services if the correct payment is not made or unreasonably delayed.
What are your liabilities?
When you provide goods and services in Australia, you may be required to provide certain guarantees under the Australian Consumer Law. Aside from your statutory obligations, you may wish to exclude all other liability, for example, if you sell products, you can state that you will not accept any liability for damage or injury that is caused to the purchaser or any other individual due to incorrect use. It is important that you set out what you are not liable for to prevent purchasers returning and seeking compensation for actions which you do not need to be held accountable for.
What do you need to protect?
Depending on the type of business you run, there are different things that you need to protect. If you are a software developer, you will want to protect your intellectual property. If you are a business consultant, there may be certain strategies or other confidential information that you want to protect. Whatever it may be, your business contract needs to have extensive and detailed clauses to protect your rights to the most valuable assets of your business and ensure that you can enforce those rights.
Well-drafted business contracts can help prevent disputes between the parties involved and save you plenty of time and money. If you are not confident that you can draft a contract which adequately covers all the legal essentials, you should seek the assistance of a business lawyer. A good business lawyer can help you prepare a contract which clearly sets out each party’s obligations and protect your business interests.