What contracts does my business need?

Businesses enter into contracts all of the time. However, there are some key contracts that are of critical importance to the continued functioning of your business. Various agreement forms are available to businesses to reflect the many types of relationship that can exist between parties. The different rights granted and duties imposed very much depend upon the particular terms within the agreement.

Below is a brief summary of the types of agreements that are available.

  • A distribution agreement is a legal agreement between a supplier of goods and a distributor of goods. The supplier sells the goods (which it may or may not have produced) and the distributor buys the goods to re-sell. The supplier will have no contractual relationship with the ultimate customer.
  • In an agency agreement in general an agent is given authority to enter into contracts with customers on behalf of the principal business. A contract for the supply of goods or services is then made between the business and the customer. Other types of agency are available whereby an agent simply finds customers and introduces them to the principal business.
  • A licence agreement can be used where a business wishes to maintain ownership of an asset (for instance a trade mark or copyright) but will permit another business to use the asset in return for a payment. This is commonly used where the business wishes to utilise the resources or expertise of another business to market its product.
  • A franchise agreement is a legal agreement whereby a business (a 'franchisor') allows another party (a 'franchisee') to use a uniform business in return for the payment of a franchise fee. The franchisor will lay down specifications for the franchisee to meet and can have much control of the business. The franchisee gets the benefit of a successful business model and the business reputation.
  • A manufacturing agreement can be used where one business appoints another to manufacture specified goods or products.

Another contract of vital importance to your business will include the terms and conditions of your sale of your product to the customer. See our section on Terms and Conditions for more information on the content of these contracts.

A member of our specialist Business Law team can provide advice as to which type of agreement is best suited to your business needs and also as to content and legal consequences of the clauses within your agreements.

For more information please call our Business Law Solicitors on freephone 0800 975 2463 or contact us by email

Finally, should your business have employees or operate from its own premises our Employment & HR team and our Commercial Property Solicitors will be able to offer detailed advice as to the content of employee service contracts and the terms of a lease or sale or purchase of property agreements.


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04 Feb 2019



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