Three Business Agreements Every Company Should Have
Business agreements vary based on the companies that use them. Companies vary widely in their focus, industry and culture. That being said, there are some key areas that are shared by all businesses in Florida and elsewhere.
All businesses interact with customers, partners, contractors or employees.
There are three essential documents that ensure these interactions are governed in a way that protects your business: the service/product agreement, the non-disclosure agreement and the non-compete agreement.
Service or Product Agreement
Sometimes called a “sales agreement” or “service level agreement”, the service or product agreement is the backbone of many businesses across a large swatch of industries. This document includes terms and conditions that govern how the product or service is provided, how and when payments should be made and how and when contract termination can occur. In many cases, this document is also the sales estimate or proposal. If not, it can be a separate document incorporated by reference in the text of the service or product agreement.
Having your standard service agreement or product agreement pre-approved by your legal counsel means that your sales team can more efficiently move from closing a prospect to signing the contract.
“All businesses interact with customers, partners, contractors or employees.”
Another business document that can be particularly useful to have on hand is a non-disclosure agreement. Non-disclosure agreements (NDAs) prohibit one party from discussing or publicizing trade secrets, other confidential information and any potential cooperation with third parties. These agreements may be frequently required if your business regularly works with partners with whom you need to share confidential information before signing a more formal binding agreement. One variation of the NDA that can be particularly useful is the mutual non-disclosure agreement. A Mutual NDA (or MNDA) protects information from both parties to the contract. Sending potential partners and prospective clients a pre-executed MNDA is a great way to use a legal document to expedite business conversations.
Employees, joint venture partners and clients who work with your business in good faith should refrain from using their access to your trade practices and staff to compete with against your business. To ensure that there is adequate legal protection built into your business and employment relationships, it is wise to ask all relevant parties to sign a non-compete agreement.
All businesses should beware of the legal complexities of non-compete agreements. While tortious interference against a business is unlawful, many competitive activities are permitted by law. Likewise, there can be little recourse to prevent certain employees from leaving your company and joining competitors unless you are currently paying them a “gardening leave” salary to keep them out of the market.
An experienced business and corporate attorney will understand the nuances and grey areas and draft a non-compete agreement that adds value to your business relationships by actually being effective in what it seek to prohibit.
The business attorneys at South Florida Law, PLLC are experienced in drafting and reviewing documents, and do so with the best interests of your business in mind. We strongly advise that you seek professional legal assistance in drafting company’s standard versions of these three essential business documents and any other documents you routinely use.
Contact us today for a free consultation by calling (954) 900-8885 or reach out via our contact form.
Burton Landau, Esq is Founding Partner of South Florida Law, PLLC. He graduated Cum Laude with a Master’s in Business Administration from the H. Wayne Huizenga School of Business and Entrepreneurship at Nova Southeastern University and his Juris Doctorate from St. Thomas University School of Law. Mr. Landau is fluent in Russian.