Business Contract

All states
Business Contract Page 1
Updated Feb 16, 2024
A business contract is a legal document agreed upon by two or more parties with the aim of establishing a binding arrangement. This document is more than just a tool for facilitating deals — it serves as a crucial component of commercial operations.
This template is coming soon for free download.
Paper titled "Business Contract", woman and man shaking hands near the desk

A business contract is a legal document agreed upon by two or more parties with the aim of establishing a binding arrangement. This document is more than just a tool for facilitating deals — it serves as a crucial component of commercial operations. Business contracts lay down defined obligations and safeguards for the entities involved, particularly when it comes to transferring ownership and rights of intellectual property.

When to Use a Business Contract

Business contract agreements are used whenever there's a need to formalize an agreement between two or more parties involved in a business process. This could be anything, from employing a new staff member, negotiating a lease for office space, and installing software to making arrangements with suppliers or customers. Therefore, it is vital to have a business contract in place to protect all parties involved. Whether you're a new entrepreneurial endeavor or an established organization, such contracts are a cornerstone of your operations. 


  • Offeror –– This is the individual or entity who proposes a business deal or arrangement. It's the responsibility of this party to clearly state the specific terms and conditions of the proposal, as well as any obligations that apply to both parties under the agreement. It is the offeror who initiates the process of negotiating a contract, possibly using a business contract template for guidance.
  • Offeree –– This party is the individual, company, or entity to whom the offer is directed. The offeree is responsible for reviewing the terms proposed by the offeror, making any necessary amendments, and either consenting to or rejecting the offer. If the offeree accepts the terms, they indicate this acceptance, thereby entering into a legally binding business contract agreement. 

Key Terms

  • Offer: It represents what is being proposed to the offeree. It could be a service, product, or terms of business relationship.
  • Obligations: These are the responsibilities that each party agrees to, which can be detailed as specific tasks, deadlines, or deliverables.
  • Termination: This section in a business contract example outlines the circumstances under which the contract may be ended, which can include mutual agreement, breach of contract, or completion of obligations.
  • Dispute Resolution: This term describes the processes that will take place if there's a disagreement between the parties, such as arbitration, mediation, or court litigation. 
  • Confidentiality: A common term in business contract samples, it stipulates that the parties must keep details of the contract and any related information secret.

How to Write a Business Contract

A business contract is an important document that encapsulates the understanding between two or more parties involved in a business transaction. It can be designed using free business contract templates available online or can also be created with the help of professional legal advisors. 

Here's how to draft such a contract, whether you represent the offeror or the offeree:

  1. Include the specific details of all cooperating parties, comprising legal names and contact information.
  2. Stipulate the details of the offer, such as the product or services being provided.
  3. Mention the consideration for the offer, including payment terms and timelines.
  4. Provide a comprehensive description of the obligations and responsibilities of each party.
  5. Specify the legal jurisdiction under which the contract operates and will be enforced using business contracts templates.
  1. State the name and details of the contract being entered into and any relevant references for clarity.
  2. Identify and discuss the applicable local, state, or federal law that guides the execution of the business contract.
  3. Affirm that the offeree has agreed to all obligations and responsibilities tied to the contract.
  4. Describe any provisions for dispute resolution or the process to amend the contract if needed.
  5. Specify any termination provisions or procedures, if applicable.

All parties involved should diligently review the printable business contract template. It's quite beneficial, although not always required, to have legal advice to protect your interests. Remember, consensus on critical components of the document, such as dispute resolution procedures or termination protocols, is pivotal to ensuring an unhindered process when creating the document. Using a business contract sample PDF could also be a beneficial tool to refer to during this process. Furthermore, it's essential to ensure that the terms and obligations contained within the document are fair, clear, and mutually agreed upon.

In conclusion, simple business contracts make it easier for you to put everything in writing, reducing the risk of future disputes or misunderstandings. They cover everything, from defining who the parties are to setting forth what will happen if the agreement is breached. Using free business contracts can help safeguard your interests by ensuring all parties are on the same page and minimizing the risk of any later disputes or misunderstandings.