Contracts: The Standard Types

By Terry Philips There are many things marketed as being helpful and imperative for your business, contract management is certainly one of those things that is essential for organizations. The thing is though, you need to understand contract types and software before you get close to starting this process. What happens when we need to know what all of our contracts mean? Ultimately, you need to research them ahead of the software needed to check, create, enforce and renew them. As law and business continue to thrive, there are a whole host of contract types, these include: partnership agreements, trade agreements and intellectual property agreements. The main two that we are going to focus on are purchasing and sales contracts. Purchasing contracts Understanding that there needs to be documentation between the seller and the buyer is something that everybody knows. Defining the condition and price of a service or goods, this particular document needs invoices and limit confirmations alongside value and quantity. Outlining entirely what has been agreed, this document is for both parties and it is known that they have been used strategically when purchasers find a trusted vendor that they want to use for a long-term relationship. The reason it is called purchasing is that it is something referenced by a company when they are looking to hit their targets. It tends to be sourced by both employees and strategic purchasers as they look to formalise purchase orders. To sum up, a purchasing contract is where conditions and terms are agreed by both the seller and buyer for the sale of goods. Sales contracts Simply put, these are the opposite of purchasing contracts; this basically defines the exact exchange of property, services or goods between a purchaser and vendor. Outlining the agreements of any deal, this sort of contract is signed across the globe every minute. This was the first style of contract, being used for the exchanging of goods. With transactions between consumers and sellers needing to be straight forward, this process has evolved over the years. They reduce liability exposer by setting up things like: delivery, consequential damages, warranties, indemnity, acceptance and termination. Conclusion Contracts are written up to be laws and, when translated from Latins mean agreements to be kept. Its as simple as that really, and they legally bind agreements between two or more parties through the formalities that come with the use of contracts. The use of a contract, whether it be for a stake in a business or a million dollar deal is imperative to ensure that everybody knows where they stand.