When your business starts entering into agreements with other businesses, you should sign commercial contracts to document these agreements and protect yourself in case of a dispute. There are many different kinds of commercial contracts, and a few basic types are highlighted below.

Purchase and Sale Agreements

Purchase and sale agreements are one of the most basic kinds of commercial contracts. These contracts document one party’s agreement to buy goods from the other party. In this type of commercial contract, it is important to specify the quantities of goods that are needed, the price to be paid, the delivery dates, what happens if the goods are not available, and what happens if other issues arise.

Services Agreements

Another type of commercial contract is the services agreement. In a services agreement, someone agrees to provide services for someone else. For example, a cleaning service could agree to come in once a week to clean your business’s office. The agreement should specify which services are to be provided and who will provide them. It should account for any insurance requirements, liability for damage caused by the services provider, and more. In some lines of work, the agreement may need a confidentiality or conflict of interest section.

Distribution Agreements

Distribution agreements cover how goods will get from the production facility to the ultimate buyers or users. Some companies specialize in distribution, which may include transportation, logistics, and even marketing. A good distribution agreement will specify which responsibilities belong to the distributor and which the production company will retain.

Production Agreements

Finally, production agreements arise when one company needs a specific part or good made, and so it contracts with another company that will produce the part. Like purchase and sale agreements, production agreements should make clear how much of the part is needed and what to do if something goes wrong.