Business Contract Types
Contracts are a necessary fact of conducting any business. The type of business contract you need will depend on what you intend to accomplish. With business contracts, you can protect yourself from being sued as well as protect yourself from being scammed. A written contract, agreed on and signed by all parties, can quickly resolve a future dispute in a court of law.
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Independent Contractor
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A work-for-hire contract is entered into by an employer and an independent contractor. Usually the contract explains that the employer will pay the contractor for services or work provided, and the contractor will receive an hourly rate or, usually, a project based fee. The contract will also specify that the contractor is not an employee of the company. As such, the contractor is not entitled to benefits such as insurance and workers' compensation. Further, the contractor is typically responsible for handling his own taxes at the end of the year.
Severance Agreement
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A severance agreement is a contract offered to an employee who is being terminated. The employer may have reason to believe that there could be the possibility of a lawsuit upon the employee's exit. This contract will offer the employee a severance package which could consist of several months' salary or other value beneficial to the employee. However, upon acceptance of the severance package, the employee will be unable to sue the employer under any circumstance.
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Bill of Sale
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A bill of sale is a contract between a consumer and a seller of goods; usually products in a store or a motor vehicle. The bill of sale basically provides that the buyer is receiving goods for payment of a stated amount. In the event the buyer does not receive the product that he paid for or if the product was not in the condition that it was promised, he would be entitled to an exchange or to have his money returned. This also works for individuals who privately sell personal motor vehicles. The seller can offer the sale "as is." This means that the buyer cannot return the vehicle and request the seller to pay for maintenance or other problems that arise.
Non-Disclosure Agreements
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A non-disclosure agreement is also known as a confidentiality agreement. This type of business contract is typically used by a company hiring an independent contractor. The company would implement an NDA to protect trade secrets, business information and confidential client information. These contracts can also be used in civil cases where the parties come to a settlement agreement. Signing the NDA would prevent either party from releasing any information about the case or the settlement.
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References
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