Agreement templates

What is an agreement between two parties?

A legal agreement between two parties takes place when both parties have reached a mutual position and have exchanged something of value — called “consideration” — between themselves.

Here are a few common examples of legal agreements:

• Service agreements
• Confidentiality agreements
• Rental agreements
• Operating agreements
• Non-compete agreements
• Non-disclosure agreements
• Independent contractor agreements

In each case, the listed agreement protects both parties from legal recourse while allowing parties to share resources or information in exchange for something else.

For example, in the case of a service agreement, a company may outline the rate of pay in exchange for the services provided by the other party. This makes sense when intangible services like cleaning or technical support need to be rendered.

Other kinds of agreements protect confidential information or allow freelancers and independent contractors to use a company’s intellectual property while ensuring that they can’t take credit for it.

What are some agreements that my business might need?

A variety of agreements are common in the business world, but which agreements your business needs comes down to the type of work you do, the individuals you hire, and the service or product you produce.

You may need an employment contract to hire workers and purchase agreements if you’re selling your product in bulk, and many of these business contracts and legal agreements may already be in place.

Take a close look at every function of your business and see if you need to produce any additional legal documents. Do your employees and freelancers need to sign a non-disclosure agreement (NDA)? Have your business partners signed their partnership agreements?

Staying on top of these documents can be tedious, but they are essential to protect your company and its intellectual property from legal jeopardy.

Better legal agreements with PandaDoc

Creating effective legal contracts is only one part of the equation. In fact, many of these documents can be reduced to a standard boilerplate.

Once you’ve created the initial draft for your agreement, you can create an agreement template within PandaDoc so that sending your contract template is fast and easy.

Frequently asked questions

What is an agreement in legal terms?

From a legal standpoint, an “agreement” is a mutual understanding between two or more persons. That agreement is not legally binding.

A great example of this would be a letter of intent, where both parties want to ensure a proper understanding before they commit to a contract.

To make an agreement legally binding, something of value must be exchanged as part of the agreement.

Is every agreement a contract?

No, but contracts are often called agreements. An agreement becomes a contract when:

1. It offers terms with unconditional acceptance.
2. Involves parties with the legal capacity to understand the terms and obligations of the agreement.
3. Exchanges something of value.
4. It indicates that the agreement is legally binding.

When those terms are met, the agreement is a contract. From a business perspective, it is generally assumed that both parties intended to enter into a contract.

For this reason, it’s always best to seek legal advice before entering into what might be considered a contract in the eyes of the court.

Do my agreements require a signature?

Neither agreements or contracts require a signature. In fact, legally binding contracts don’t even need to be written down!

However, in order to prevent misunderstandings and miscommunication, it’s better to get everything in writing.

PandaDoc makes this easy by allowing both parties to sign documents with electronic signatures.

Is an agreement binding?

Once something of value is exchanged between knowing parties, an agreement becomes binding. This is true even outside the business world.

Real estate operates on housing contracts, room rental agreements, sublease agreements, roommate agreements, and more. When renters sign a lease, often for a 12-month rental, they are entering into a binding agreement.

Binding agreements are prevalent in every aspect of societal life. Even child custody and separation agreements are considered a type of contract based on the laws of the state.

How do I write an agreement?

In order to write an effective agreement, you’ll need to determine if you intend it to be legally binding and what you plan to offer.

In the case of real estate, the offer is straightforward. For many business operations, that offer may not be as clear. Sales agreements or payment agreements often can’t be written as a boilerplate and require negotiation. This is why proposals and quotes are common before a contract is created.

The PandaDoc template library has hundreds of examples to help you get started, but we recommend that you consult legal experts to help you finalize more sensitive contracts.

Once you’ve created an effective agreement, you can upload it to the PandaDoc editor and use our software to insert fields for electronic signatures before sending your documents to your service providers and employees.