A properly drafted, thoughtful business agreement
is crucial to the success of any corporation
, limited liability company
or joint venture
. Businesses depend on agreements with other businesses, individuals and partners to operate, thrive, and run efficiently, effectively. It is highly recommended businesses use formal written agreements, when conducting or engaging in business transactions
(or forming a corporation, LLC, or other type of business entity
) that state the parties’ expectations and provide dispute resolution
mechanisms. Business agreements are important because they help account for negotiations, agreements between parties, specific terms and conditions, and ensure the parties are getting what they bargained for. Most importantly, if a conflict does arise, written contracts are enforceable by a court. Well-drafted business agreements ensure the parties’ interests and expectations are represented.
A business agreement states the terms and conditions imposed on a particular transaction or business formation. These contracts state what parties’ duties and responsibilities are, outline the business’s financial and functional decisions, and delineate how disputes, if they arise, will be resolved.