Choosing the right type of business contract means your document is legally binding, contains all the clauses and provisions necessary for your specific situation, and is beneficial for both parties.
By doing so, you’re sure that the stated obligations, rights, and remedies correlate with the nature of the interaction, business needs, and legal background.
An incorrect selection of a business contract type can lead to necessary aspects missed or wrongly formulated, making your contract inaccurate, potentially non-compliant, and creating reasons for its termination — including legal exposure for you and your team.
Furthermore, the wrong type can also strain business relationships, damage your reputation in the market, cause financial losses, and even the failure of your business.
And we don’t want that!
In the following sections, we will provide a comprehensive overview of the types of business contracts.
You’ll understand the category your desired agreement falls under and its key legal implications.
Finally, you will be able to download an appropriate contract template and adjust it to your special needs with ease rather than crafting your own agreement from scratch.
All business contract types can be categorized accordingly.
This approach to contract categorization is based on their purpose.
For example, sales contracts cover buying and selling deals, service contracts guide the relationships between service providers and their clients, and employment contracts regulate hiring and job duties.
This covers the listed entities and the roles these parties play.
Example: partnership agreements define the responsibilities of co-founders; lending contracts specify duties and benefits for the party loaning capital and the party borrowing it.
This categorization relies on actions required to make the contract legally binding.
Whether you meet in person for old-school wet signatures or use an electronic signature software, this brings the contract to life.
This categorization classifies contracts based on the nature of what a party is required to abide by after signing a contract.
Among the possible obligation types are confidentiality, non-disclosure, non-compete, performance, payment, and others.
This one approach distinguishes long-lasting contracts from shorter ones.
Example: short-term contracts cover a single transaction; long-term agreements may span years; and perpetual contracts continue indefinitely until terminated forcibly.
Lastly, contracts can be classified based on the degree of completeness.
An example here: comprehensive contracts cover all aspects of the agreement, while others may be framework agreements that provide just a general structure for future, more specific contracts or addendums.
We’ve categorized contracts using “nature of agreement” as the most meaningful approach, with a focus on those that are both commonplace and vital.
Scan through the list, select suitable type(s) for your business and use the attached free templates in order to simplify your contract workflow process significantly.
Sales contracts and purchase agreements define the terms and conditions for transactions where you sell goods or services to customers.
Key contractual elements of such agreements include:
Well-drafted sales contracts also protect you from legal risks if issues arise down the road.
Purchase orders, bills of sale, order forms, and supply agreements all fall under the broader category of sales contracts and incorporate the essentials needed to formally govern the sale of goods or services.
Specific types of sales and purchase contracts:
This contract type establishes the foundation for predictable, reputable business relationships between the buyer and seller.
It defines rights and responsibilities related to orders, deliveries, payments, and other transaction specifics while protecting parties from potential legal risks.
A purchase order covers official requests from buyers to sellers for products or services.
Such orders specify the types, quantities, and agreed-upon prices of products or services to be purchased, serving as a legally binding offer to complete the transaction.
Legal documents serving as proof of ownership transfers from sellers to buyers.
Such documents are often used in private sales transactions to protect both the buyer and seller.
These forms are standardized documents used by businesses to record customer purchase requests and streamline the ordering process.
They provide essential details about products or services requested.
Supply agreements establish long-term arrangements between suppliers and buyers.
Contracts of this type outline terms, conditions, and responsibilities to ensure a steady flow of goods or services at agreed-upon terms.
Service and provider contracts establish the terms and conditions for service delivery such as:
Service and provider contracts serve as a clear framework for the service provision.
This contract ensures both parties understand their obligations and responsibilities.
They also offer legal protection, help to prevent misunderstandings and disputes, and guarantee that the service provider is compensated for their work.
Specific types of service and provider contracts:
Service agreements define the terms and conditions of service provision, including scope, duration, payments, and quality standards.
They are aimed at ensuring clarity and legal protection for both parties.
Agreements with independent contractors formalize arrangements with individuals or companies hired to provide specific services.
They identify service providers as independent contractors rather than employees, clarifying their roles and responsibilities.
This category of agreements defines the terms and scope of professional consulting services, including deliverables, fees, and confidentiality clauses.
Such contracts facilitate successful client-consultant relationships.
Vendor agreements formalize business relationships between companies and their suppliers.
They address pricing, product quality, delivery schedules, and dispute resolution.
These kinds of agreements define the relationship between a franchisor and franchisee.
It allows the franchisee to operate a business using the established brand, products, and business model.
This is a broad category which defines the fundamental agreements between two parties for future transactions or services.
Such agreements are aimed at simplifying further negotiations between the parties.
This category consists of comprehensive contracts that govern services provided to large organizations.
They cover aspects like pricing, performance metrics, and compliance requirements.
Employer and worker contracts describe the terms and conditions of a professional relationship between an employer and an employee or contractor. Key elements these agreements should specifically include:
Employer and worker contracts are essential for establishing employment relationships, setting up clear expectations, and protecting both parties’ rights.
Such contracts define the terms and conditions of employment for individuals hired by a company.
They usually identify job duties, compensation, benefits, and termination provisions.
These agreements restrict employees from working for competitors or starting competing businesses for a specified period after leaving their current employer.
This is aimed at protecting sensitive information and trade secrets.
Confidentiality agreements, often referred to as non-disclosure agreements or NDAs, are vital to the employment sector.
These agreements safeguard sensitive information that is exchanged between parties in a business setting.
An independent contractor agreement describes the nuances of the relationship between a company and a contractor.
Unlike an employee, a contractor works independently, often on a project basis.
A consulting agreement is a contract between a company and a consultant.
It’s used when a business seeks external expertise for specific tasks or projects.
Lease and rental contracts represent the terms and conditions for property or equipment rental or lease, like:
Lease and rental contracts outline terms, ensuring that the property owner is compensated for the use of their property or equipment.
Specific types of lease and rental contracts:
This contract category covers the rental of property.
Such contracts cover terms, conditions, and responsibilities of both the lessor (landlord) and lessee (tenant).
Within this category, you can find contracts that set the terms for renting property, such as apartments or equipment.
They specify rental periods, payment, and maintenance responsibilities.
Similar to lease agreements for domiciles, this category establishes terms for leasing tools or equipment.
Agreements specify conditions for use, maintenance, and possible buyout options.
These agreements define the business partnership or ownership structure with a set of specific contractual elements such as:
Partnership and ownership agreements help potential partners find common ground and make sure each partner’s interests are legally protected.
Specific types of partnership and ownership contracts:
Such agreements define the terms and conditions of a business partnership.
The agreement usually outlines the roles, responsibilities, profit-sharing, and decision-making processes of each partner.
This category of agreements formalizes partnerships between two or more business entities for a specific project or endeavor.
A contract of this type should detail each party’s contributions and responsibilities.
Shareholders’ agreements regulate the relationship between shareholders of a company, addressing their voting rights, stock transfers, and dispute resolution.
This agreement type includes contracts used by limited liability companies (LLCs).
They outline the company’s internal structure, management, and distribution of profits among members.
Financial agreements serve as the backbone of many business transactions by setting out the specifics of loans, repayments, collateral, and other financial obligations. They typically cover:
Financial agreements are required to ensure that all parties are on the same page regarding their financial obligations and rights, thereby reducing the risk of financial disputes.
Moreover, these agreements provide legal recourse in case of non-compliance or default.
Specific types of financial contracts:
These agreements outline the terms and conditions of loans, including interest rates, repayment schedules, and default provisions.
The promissory notes category covers written promises to repay a debt.
These notes contain essential details such as the amount borrowed, interest rate, and repayment terms.
These contracts grant a creditor a security interest in a borrower’s collateral, providing recourse in case of loan default.
Indemnity agreements are often used in high-risk transactions.
They are aimed at protecting at least one of the parties from financial loss, liability, or damage.
Within this category, you can find contracts in which a third party agrees to fulfill the obligations of a borrower if that borrower defaults on a loan or other obligations.
Licensing and intellectual property contracts govern the use, transfer, and protection of intellectual property (IP) rights and typically address:
Licensing and intellectual property contracts are vital in fostering innovation and business growth.
They allow creators to monetize their IP while ensuring that their rights are protected.
These contracts also provide a legal framework for dealing with IP disputes and infringements.
Specific types of licensing and intellectual property contracts:
Licensing agreements permit one party (the licensee) to use another party’s (the licensor’s) intellectual property.
These agreements specify the scope, duration, and any royalty payments.
Confidentiality agreements, also known as non-disclosure agreements (NDAs), protect sensitive information shared between parties during the course of business.
The main goal for this agreement type is to prevent the disclosure of sensitive information to third parties.
The agreements falling into this category involve the transfer of ownership of IP from one party to another.
These contracts dictate the terms of use, development, and distribution of software and technology products and services.
They are the cornerstone of the tech industry and typically cover:
Technology and software contracts protect the rights of developers and service providers, as well as their clients and users, while ensuring that they also understand their obligations and restrictions.
Specific types of technology and software contracts:
Similar to the licensing agreements, software license agreements govern the use and distribution of intellectual property (in this case, a software).
The EULA category combines contracts between software providers and end-users, defining the terms of software usage.
This agreement type details the terms of creating and delivering software.
These terms include milestones, deadlines, and intellectual property ownership.
Beta testing agreements allow users to test pre-release versions of software or products.
Beta testing agreements usually include the responsibilities of users and feedback provisions.
These agreements describe the nuances of providing the tech-related services.
They define scope, deliverables, and payment terms.
Real estate and property contracts govern the sale, lease, and management of property.
These contracts are pivotal in the real estate industry and typically address:
Real estate and property contracts are essential to ensure smooth property transactions and services.
Specific types of real estate and property contracts:
Such agreements define the terms for the purchase and sale of real estate (residences or businesses). Among the defined entities are price, terms, and conditions.
This contract category encompasses both the lease and rental of property.
Such contracts outline the terms, conditions, and responsibilities of all parties involved, including the lessor for leasing or the property owner for renting, and the lessee.
This category covers the agreements defining the scope and responsibilities of property managers in overseeing rental properties.
Deeds of trust are documents that secure a loan for real estate, giving the lender assurance should the borrower default.
Marketing and advertising contracts define professional relationships between a business and an advertising agency, influencer, or media outlet. Their key aspects are:
Marketing and advertising contracts are essential for managing business relationships and expectations.
They provide a clear framework for the service provision, ensuring both parties understand their obligations and responsibilities.
These contracts also offer legal protection, helping to prevent misunderstandings and disputes, and ensuring that the service provider is compensated for their work.
Specific types of marketing and advertising contracts:
Advertising agency agreements set out terms for the provision of marketing and advertising services by an agency to a client.
These contracts establish the terms of collaborations between influencers and brands, specifying deliverables, compensation, and content rights.
Product placement agreements formalize arrangements between companies and media outlets for the promotion of products or services within content.
Business contracts serve as the bedrock of professional relationships, providing a clear framework for various transactions, services, and partnerships.
They are essential tools that help businesses manage their relationships, protect their interests, and ensure smooth operations.
Our comprehensive catalog of business contracts is designed to help you see the big picture while also serving as a foundation for our convenient-to-use template collection.
Find the most appropriate type(s) for your business and modify these free templates to suit your unique business needs.
Once you’ve personalized the template to your business requirements and context, you can manage the full journey of your contract by implementing our all-in-one contract management software.
It seamlessly helps you handle collaborative editing during negotiation, tracking changes, e-signing, and execution control.
Best of all, there’s absolutely no obligation or strings attached to give the platform a try and see how well it fits your needs.
PandDoc is not a law firm, or a substitute for an attorney or law firm. This page is not intended to and does not provide legal advice. Should you have legal questions on the validity of e-signatures or digital signatures and the enforceability thereof, please consult with an attorney or law firm. Use of PandaDocs services are governed by our Terms of Use and Privacy Policy.
Olga Asheychik Senior Web Analytics Manager at PandaDoc
Olga is a Senior Web Analytics Manager at PandaDoc who has been working in the Digital Marketing field for the past 15 years. Olga had roles driving marketing campaigns in document automation, contracts, invoices, and agreements. In her daily life, she is a big fan of traveling and connecting with new people.
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