The types of contracts a small business needs vary depending on the nature of the small business. However, there are some very common contracts that most small businesses require and can be easily drafted with the help of a small business lawyer. This article briefly outlines each of these types of small business contracts.
Client/Customer Contracts
For Businesses That Provide Services
If your business provides services, you will need a template client contract that you can amend for every new client. The client contract will clearly set out important details like:
- the services that you provide;
- an expected start and completion date (if necessary),
- the fees you will charge; and
- how and when you expect to be paid.
For Businesses That Sell Goods
If your business is involved in selling goods, then you will need a sales contract that can be signed by your customers or a set of online sales terms and conditions which customers can view on your sales website. The sales contract should indicate:
- what products are for sale;
- the prices for the products; and
- your exchange, returns and refunds policy.
You should note that under the Australian Consumer Law, there are certain guarantees you are required to give to consumers, so if a product or service is faulty, damaged or not to the customer’s expectations, depending on the circumstances, you are required to offer a:
- replacement;
- refund;
- repair; or
- resupply.
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Employment Contracts
If you employ any staff, you will need an employment contract. As a small business, you may only have a small number of employees. However, it is still important that your employees understand their obligations. The best way to ensure this is to have an employment contract that clearly sets out your expectations. This may include expecting your employees to:
- be at a business location during core business hours;
- understand their obligations concerning the intellectual property of your company; and
- follow certain policies or dress codes.
Contractors Agreement
Some small businesses do not have employees but choose to have contractors to who they can contract work. This may be more suitable for businesses that may not yet have a steady flow of customers. However, if you have contractors performing services for your business, you and the contractor each must understand your rights and responsibilities in the relationship. Misunderstandings that occur, such as the contractor holding itself out as an employee of your business, could lead to your business incurring liability and possible legal action taken against you.
Lease
If your small business operates from a physical premise that you do not own, your lease is a fundamental contract that you should review in detail. If there are any concerns with your lease or if you feel that you are being bullied by the landlord/lessor, you should seek immediate assistance from your lawyer.
Website Terms of Use and Privacy Policy
If your small business operates online, you should ensure that your website contains a terms of use and a privacy policy.
Terms of use set out the rules for visitors to your website. They protect your website by including:
- what users can and cannot do on your website and with its contents; and
- a disclaimer/limit to your liability when users access your website.
If your small business collects information about users who access your website, then a privacy policy is required under the Australian Privacy Principles (APPs). A privacy policy should address:
- the personal information you collect;
- how that information is used by you (and others); and
- how you will store the information.
Misuse of personal information online is a serious offence, so you should speak to a lawyer to ensure your websites terms of use and privacy policy are legally compliant.
Key Takeaways
Having good legal documents can help clarify your arrangements with third parties. These contracts can also help you grow the small business and avoid disputes, which are costly and time-consuming. If you require any legal contracts drafted, LegalVision’s contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
They provide the rules for visitors to your website. Commonly, terms of use include what users can and cannot do on your website and a disclaimer/limit to your liability when users access your website.
A privacy policy should cover the personal information you collect, how you (and others) use that information and how you will store the information.
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