Most agreements which
are formed between any businesses or collaborations can be considered business agreements. Agreement is a prerequisite of any valid contract, payment,
compromise, variation or discharge of contract or conveyance. Business
Agreements can be written as well as verbal but the written agreements provide
more certainty for both parties than verbal agreements. They clearly set out
the details of what was agreed. It can be written or oral but written
agreements provide more certainty to both the parties than verbal agreements.
And the most beneficial part being it serves as a record which reduces
possibility of ‘future’ disputes.
There are basically
twelve types of business agreements which cover almost all the areas of
business practices such as (i) Rent Agreement, (ii) Partnership Deed, (iii) Franchise
Agreement, (iv) Employment Agreement, (v) Service Level Agreement, (vi) Confidentiality
Agreement, partnership, rent agreements etc. Some of the popular business
agreements have been discussed in detail below –
1. Rent
Agreement – When a Landlord gives the tenant, right to possess its premises
(whether residential, commercial, industrial or any other), a contract is made
between both the parties stating the terms and conditions of the premises
occupied, known as Rent Agreement which cannot be amended or modified unless
both parties agree to the same. Since, rent agreement defines the relationship
between landlord and tenant; it should be in writing although it can be
explicit or tacit.
2. Partnership Deed – When two or more person enters
into a partnership, then to avoid any kind of coercion, disagreement or
unacceptability a written legal document is prepared known as Partnership Deed
and which is made under the Indian Registration Act, 1908 so that this deed
cannot be apprehended, destroyed or violated in the possession of the partners.
In case future disputes prove difficult to arbitrate, this deed helps to
resolve any contention between the partners.
3. Franchise Agreement – Franchisee
has been granted right to use the franchisor’s system and can operate
franchised business as owner of the business but may be restricted to certain
locations and locating another business nearby. For this very purpose, a legal
document should be prepared called franchise agreement in which all the payment
terms, agreement renewing provisions or any restrictions pertaining to transfer
of the franchise should be clearly specified.
4. Employment Agreement – An
Employment contract is an agreement between an employer and employee that sets
out terms and conditions of employment and is the basis of the employment
relationship. A contract can be in writing or verbal but the advantage of a
written agreement is that it outlines the terms and conditions agreed to by
both parties i.e employer as well as employee and also it saves a lot of
potential misunderstanding further down the line. Most employees are legally
entitled to a Written Agreement of the main terms and conditions of employment.
It is a formal agreement that specifies the conditions of the relationship
between an employee and an employer including compensation and expectations.
Also referred to as employment contracts, they are often executed for a
specified period of time, such as one year.
5. Service Level Agreement – Service
Level measures the performance of a system, certain goals are defined and the
service level gives the percentage to which those goals should be achieved.
Fill rate is different from the service level. Percentage of calls answered in
a call centre. SLA is a contract between the person who is providing the
services and the ultimate consumer of those services, stating the degree of
services expected from the provider of services. How the service itself is delivered
or provided does not included in the definition of SLAs. However, actual
measurements for each SLA differ depending upon the provider of the services,
uniformly covered areas, quality and quantity of work, quick receptiveness and
competence. The Agreement aims to builds common understanding,
responsibilities, areas prioritized, warranties and guarantees given by
provider of services. This can be legally binding formal or informal ‘Contract’
(for example, internal department relationship(s). The agreement may involve
separate organizations, or different teams within one organization.
Have a great day ahead!
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