What is a Business Agreement?
A business agreement is a legal agreement between two parties, it can control any commercial interactions. Some common types of business agreements are:
- Shareholder agreements- This is also known as ‘Partnership agreements’ or ‘Ownership agreements’, the title depends on the type of entity that is being established. The shareholder agreement document identifies and allocates the rights and responsibilities to each partner, it also highlights the standard business operations and what happens if a partner leaves or the company is dissolved.
- Supplier Agreements- This type of agreement highlights the terms of the business relationship between both entities. The terms listed in this agreement typically includes the price, quality, and quantity of the goods from the supplier, this is a vital element in maintaining a healthy work relationship between the business owner and supplier because it prevents any risk of complications and disputes with suppliers who may be failing to provide or meet their standard of service.
- Non-disclosure agreements– This type of agreement is vital with the business’ confidentiality as it ensures the employees are aware of the expected standard of employee confidentiality. In the Non-disclosure agreement, employees will be notified of what information they are allowed to disclose or protect during their time with the company and after it.
Do I need a Solicitor when I am completing a Business Agreement case?
It is highly recommended to seek a Solicitor’s legal advice when completing a business agreement, this is to ensure you are aware of exactly how you are entering into the agreement. While some business agreement contracts may not need to be in writing, it is always recommended to record it in writing in the common case a dispute arises.
What is the difference between a business agreement and a contract?
Business agreements and contracts are legally two separate terms; however, they are often referenced interchangeably.
Business agreement: a mutual plan that is established and understood between the parties. This can be either oral or written.
Business contract: a legal agreement which outlines terms and conditions that are enforceable in the courts. This is an official written document whereas a business agreement is less formal.
Case Study
We have created two hypothetical case studies to compare the difference between ‘business agreements’ and ‘business contracts’.
Business Agreements
Jennifer is the manager of ‘Espresso Café’, she contacts Peter who is the manager of ‘Irish Coffee Beans & Co., through phone call. Jennifer asks him to supply 30kg of coffee beans to her café the following Monday. Peter agrees to this, and they informally arrange for Irish Coffee Beans & Co.to deliver the goods the following Monday. This informal agreement is considered a ‘Business Agreement’ because it was agreed on orally and did not require legal advice or supervision.
Business Contracts
Jennifer is the manager of ‘Espresso Café’, she approaches Peter who is the manager of ‘Irish Coffee Beans & Co.’, she informs Peter that she is looking to do business with him, Peter agrees, and they schedule an appointment with a local business solicitor at P.A. Duffy & Co. Peter and Jennifer sit down with the specialised solicitor to draft a business contract, the solicitor outlines the terms of their relationship and each parties legal rights and responsibilities in the contract. The agreement is settled that Peter will supply 30kg of coffee beans to Espresso Café every months from December 2021 to December 2022 for an agreed-on price. They agree that the contract expires 1st December 2022 and may require renewal depending on the business relationship and operations. Peter and Jennifer sign their names to confirm their mutual understanding of the terms of the contract. This formal agreement is considered a ‘Business Contract’ because a contract has a legal authority behind it whereas an agreement may not.
How we can help
P.A. Duffy & Co Solicitors have years of experience working closely with clients who are drafting, renewing, and challenging business agreements in Northern Ireland. We pride ourselves in our commitment to seek the best legal outcome for our clients and their business. Our solicitors understand that business law can be overwhelming for many business owners, so we ensure that the majority of the legal burden is taken off you as we deal with legal matters in your business.
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