Explain the Different Types of Business Agreement and the Importance of the Key Elements Required for the Formation of a Valid Contrac

Topics: Contract, Offer and acceptance, Contract law Pages: 5 (1784 words) Published: May 24, 2012
Different Types of Business Agreements

A business agreement is a formally drawn written document or oral promise between two or more parties that details a particular business venture. A typical business agreement specifies details such as cost of goods sold, the product or service required, milestones, insurance, and work completion deadlines. Unilateral Agreement

A unilateral agreement or contract is a legal binding one in which one party undertakes a promise without securing a similar promise or undertaking from another party. A unilateral agreement is a one-sided contract between an offeror (or promisor) and an offeree (or promisee). The party making the promise in exchange for goods or service is the offeror. The party acting on the offeror's promise is the offeree. An example of a unilateral agreement is a newspaper ad offering reward for a lost item, such as a passport. The offeree is under no legal obligation to look for the passport, but if he does find and return the lost item, the offeror is legally bound to pay the reward money. Bilateral Agreement

A bilateral agreement or contract is one in which two parties exchange legally binding promises. Most business transactions undergo bilateral agreements, in which buyers and sellers exchange promises to buy and deliver a product or service. A sales contract is a bilateral agreement. One party promises to deliver a good or service, and another is legally bound to incur the cost of the good or service purchased. Partnership

A partnership is a type of business agreement that is made between two or more parties or general partners (owners). A partnership agreement is a formal document that details the general provisions, capital, profit and loss, salaries and withdrawals, interest, managerial duties and restrictions, banking, books, voluntary termination, death and arbitration. The general provisions include the name of the partnership, purposes, place and term of business. Capital refers to financial or other contributions by the partners. The profit and loss incurred by a partnership is shared between its partners. All partnership funds are commonly deposited in bank checking or saving accounts. All partnership information--such as assets, liabilities and others--are maintained in partnership books that are equally accessible to all partners. And the other side:

Sales Agreements
Although sales agreements can be executed between merchants and consumers, the highest value sales agreements are usually executed between businesses. The law of every state in the US requires sales transactions with a value of at least $500 to be evidenced by a written contract in order to be enforceable. The contract need not be evidenced by a single documents, however, the mere exchange of memos or emails can constitute a binding contract under the Uniform Commercial Code (a set of statutes governing the sale of goods that has been passed by every US state legislature). Employment Agreements

In most industries written employment agreements are not required in order to form a valid employer-employee relationship, however, employment agreements are common in the white collar professions and in industries represented by labor unions. A good employment agreement will cover work rules, duration of employment, remuneration, grounds for termination and job duties. Individual employment agreements are often governed by master agreements drafted with the input of labor unions and applicable to every employee that is both an employee of the company and a member of the union. Independent Contractor Agreements

An independent contractor agreement is a contract between two independent parties whereby one party performs services for the other (building construction contracts are often structured in this way). The party performing services may be a company rather than an individual, and remuneration is often based on a fixed price for a particular project rather than a set amount...
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