8 Common Contracts to Know About

8 Common Contracts to Know About

by Bilal Kaiser, January 2013

No one ever said running a business was easy. There are many contracts business owners need to know about and the legalese involved can be overwhelming. But protecting your business and its assets should be your main concern. Below are some contracts you can use to make running your business a little easier:

1. Nondisclosure agreement: When dealing with vendors, clients or potential new hires, this form can help protect your confidential information and give you legal support if the other party discloses it.

2. Bill of sale: An agreement stating the who, what, when, and how much of a particular sale of personal property. It can also prove the identity of the legal owner.

3. Promissory note: The real-world version of an IOU. If someone wants to borrow money, they should use this note to memorialize the loan and the requirements for repayment, interest and penalties.

4. Employment agreement: A contract setting the terms of a person's employment. Details can include compensation, bonus structure, and causes for termination.

5. Licensing agreement: A licensing agreement allows you to make money on your invention or creation by allowing someone else to use it. You can use your license to outline terms like payment, exclusivity and restrictions on reproduction. This can be useful if you want to monetize the intellectual property you've created but need another person's assistance to do this.

6. Residential leases: If you own or manage residential property and want to rent it out, a residential lease agreement is essential. The lease can cover anything from rent and security deposits to rules about pets and parking. Note: Many states have very specific rules covering residential leases, so be sure you've reviewed them before drafting your contract.

7. Power of attorney: A power of attorney lets an individual make legal, financial and medical decisions on someone else's behalf. The person to whom the power of attorney is given is called the attorney-in-fact or the agent. The attorney-in-fact can manage important matters for someone like an aging parent or a child in college who is living far from home.

8. Pet care agreement: A pet care agreement covers the needs of your furry loved one if you die before he or she does, including provisions for their food, medication and exercise. This specific agreement also includes the ability to leave funds to care for your pets after you're gone. Because, hey—Fluffy needs to be taken care of, too.

Most of these agreements, and many others that can help you run your business more effectively, are available at LegalZoom. Click here to learn more.