In any business arrangement, clarity is key, and creating a general agreement is one of the best ways to make sure that both parties understand the terms and conditions that will govern the relationship. Overall, a solid general agreement makes the obligations and expectations clear to everyone involved, so that both parties feel adequately protected throughout the course of the business arrangement.
Because a well-designed general agreement can mean the difference between smooth sailing and eventual, costly problems down the line, putting a carefully worded general agreement in place provides important protection for your enterprise—and the best time to get started on one is now.
Why you may need a general agreement ASAP
At the beginning of a business arrangement, it can appear that each side completely understands all aspects of the agreement between them.
Unfortunately, a disagreement can occur at any time—including right from the start—and the longer a professional relationship continues, the more likely the possibility of having an issue becomes. Personnel changes, for example, especially in management, can mean that contract terms that were previously unstated but mutually understood can suddenly become points of contention.
Because you don't know when or how contract terms might become muddled on one side or the other, getting a general agreement contract—sometimes also called a business agreement contract, general contract for services agreement, or corporate agreement—in place as soon as possible is a priority for any enterprise.
If you have similar relationships with many parties, you may consider incorporating a general agreement form into your standard set of business documents, so that you can more easily change the specific terms to reflect each individual relationship.
Qualities of a good general agreement
At its core, a general agreement is a business contract, and you should treat it with the appropriate level of care and concern. When creating one—just as with any business agreement—you want to make sure the contract verbiage is clear, concise, and comprehensive.
Pay careful attention to the rights and responsibilities of each party and also provide measurable outcomes so that each party can verify whether the other is fulfilling its promises. For example, depending on the type of business involved, the contract could identify product delivery and payment dates, or specify the number of additional clients required to be added within a certain time frame.
Other subjects that may be included in a general agreement contract include the following:
- The choice of state's law and forum that govern the agreement
- Whether any rights or responsibilities may be delegated or assigned to other parties
- How amendments to the agreement may be made
To create your general agreement, you may want to work from a general agreement form, which provides a broad idea of what should be included, or to work with an attorney. While basic contract agreements can be a great place to start, having one tailored to your specific business arrangement is usually advisable. Within your own personalized agreement, you can provide details that apply only to your relationship with the other party, which may involve anything from particular delivery dates to specific remedies for breach of the agreement.
Having a general agreement that clearly represents what each party must do in a business relationship can help dodge many potential legal bullets down the road, as well as keep the relationship between the parties in good working order. Moreover, along the way, you can rest easy with the peace of mind that you are doing exactly what is expected of you in a given business arrangement.
Find out more about Business Management