Agreements related to regulating the business relationships between individuals or businesses where they define the actions that must be done or refrain from doing others are called commercial contracts.
There are two ways of defining business contracts, one is verbal and the other is written. Although most of these contracts are done in writing having the sign of the participating delegates.
Written Business Contracts are move prevailing because it is easy to enforce parties on how to perform their responsibilities under the transaction.
Meanwhile, if you want to hire a top law firm in Phoenix, consult Merchant Law Firm PLLC. They provide commercial contract services after understanding your business objectives.
Examples of commercial contracts
In business, many commercial contracts are signed and are essential for the growth of the business. No business can be administered alone without the support of other businesses and individuals. It can be defined by the phrase “Strength is always with unity”.
For Instance, your business comes in a software license agreement with the native companies for the software you use in your organizations. The other example can be listed below:
- Business purchase agreement
- Joint venture agreement
- Employment contracts
- Franchise agreement
- Intellectual property license and assignment
- Non-disclosure agreement
- Partnership agreement
- Loan and finance agreements
- Purchase and supply agreement
- Sale and distribution agreement
- Shareholders agreement
Motive of commercial contracts
Irrespective of the size of the business, It is necessary to ensure your commercial contracts have accurate agreements on business arrangements, adequately protect your business, and restrict your liability.
Roles of Commercial Contracts in Business World
Define rights and agreement
Commercial contracts do help in defining the rights and obligations the participating businesses have while being in the contract. Your contract has the list of the terms that you agreed upon with the partner party regarding the responsibilities of both the participators.
Facilitate a reference for dispute resolution
Businesses while collaborating, arguments may arise. However, to resolve such diverging rules themselves or via litigation, the commercial contract will be used to find out where the fault lies.
Protect business interest
Commercial contracts have many clauses in it. Although through the confidentiality clause or the likewise the contracts allow you to protect the interest and lessen the risk from dealing with other businesses or parties.
Parts of a commercial contract
Your commercial contracts should identify the parties in the transaction. Ensure you write their correct legal names. The transaction details, date, the goods or services sold, price, payment details, and how the agreement can be terminated should be written in clear terms. Otherwise, the contract might be unenforceable.
Commercial contracts also list standard clauses like:
- Confidentiality clause to safeguard the unauthorized disclosure of confidential particulars.
- Dispute Resolution clause to put forward the way to solve any dispute arising during the transaction. It is instructed to be solved by themselves, by the board of the signing committee, or through litigation.
- Information on the court that will have jurisdiction over matters emerging from the transaction. The governing law especially for domestic and international transactions.
- Termination clause acknowledging how any party can walk out of the arrangement and conditions to end the contract.
- Indemnity clause to protect the participating parties from liabilities that could have been caused by a breach of contract or negligent acts of third parties.
- Liquidated damages clause to specify the predetermined amount to be paid as damages for failure to act under a contract.
- The force majeure clause relieves them from performing their contractual obligations if something unexpected happens that is beyond their control.
How to Choose the Right Corporate Law Firm
Before choosing a business transaction lawyer, businesses must pay attention to a few points that we are going to discuss below:
Size of your Business
The foremost thing to decide over picking the law firm is examining your business size. For instance, if the business is small, newly launched, or is a start-up one is not required to collaborate with law firms. They can rather hire a single business transaction lawyer.
Legal Professionalism
One must go through the expertise and experience of the law firm before opting out. Examine whether the law firm has represented businesses that are similar to yours. If it did then go ahead thinking on the succeeding points.
Former Client Experiences
Get to know about the experiences of the previous clients of the law firms. This will help you know beforehand how your experience is gonna be with them and what to expect.
Terms of Engagement
Law firms do have various kinds of services to provide. It could be real estate law services, corporate law services, contract law services, etc. You must pick the right services taking care of the terms of engagement to elude any discrepancy over time.
Fiscal Terms
Every business has a different budget and accordingly, they must opt out of law firms. Generally, law firms work on monthly remittances. It means clients need to clear their pay every month. Moreover, it also depends on the discussion between the participating parties. How long the legal firm and business gonna work together also affects the fiscal terms.
Final Phrase
In this blog, we got to know the real meaning of Commercial Contracts and what the clauses essentially contain in them besides additional clauses. Then we went through the examples of commercial contracts to hold a good grip on its understanding. Additionally, we came up with a solution on how to choose the right law firm. This includes considering the business size, examining the experience of previous clients, and so on.
However, Merchant Law Firm PLLC offers the best business attorney Phoenix. They proceed with a scalable approach to suit the needs of small as well as big businesses.