Choosing the right type of business contract means your document is legally binding, contains all the clauses and provisions necessary for your specific situation, and is beneficial for both parties.
By doing so, you’re sure that the stated obligations, rights, and remedies correlate with the nature of the interaction, business needs, and legal background.
An incorrect selection of a business contract type can lead to necessary aspects missed or wrongly formulated, making your contract inaccurate, potentially non-compliant, and creating reasons for its termination — including legal exposure for you and your team.
Furthermore, the wrong type can also strain business relationships, damage your reputation in the market, cause financial losses, and even the failure of your business.
And we don’t want that!
In the following sections, we will provide a comprehensive overview of the types of business contracts.
You’ll understand the category your desired agreement falls under and its key legal implications.
Finally, you will be able to download an appropriate contract template and adjust it to your special needs with ease rather than crafting your own agreement from scratch.
Making sense of business contract types
All business contract types can be categorized accordingly.
By the nature of agreement
This approach to contract categorization is based on their purpose.
For example, sales contracts cover buying and selling deals, service contracts guide the relationships between service providers and their clients, and employment contracts regulate hiring and job duties.
By the parties involved
This covers the listed entities and the roles these parties play.
Example: partnership agreements define the responsibilities of co-founders; lending contracts specify duties and benefits for the party loaning capital and the party borrowing it.
By execution method
This categorization relies on actions required to make the contract legally binding.
Whether you meet in person for old-school wet signatures or use an electronic signature software, this brings the contract to life.
By specific obligations
This categorization classifies contracts based on the nature of what a party is required to abide by after signing a contract.
Among the possible obligation types are confidentiality, non-disclosure, non-compete, performance, payment, and others.
By duration
This one approach distinguishes long-lasting contracts from shorter ones.
Example: short-term contracts cover a single transaction; long-term agreements may span years; and perpetual contracts continue indefinitely until terminated forcibly.
By completeness
Lastly, contracts can be classified based on the degree of completeness.
An example here: comprehensive contracts cover all aspects of the agreement, while others may be framework agreements that provide just a general structure for future, more specific contracts or addendums.
We’ve categorized contracts using “nature of agreement” as the most meaningful approach, with a focus on those that are both commonplace and vital.
Scan through the list, select suitable type(s) for your business and use the attached free templates in order to simplify your contract workflow process significantly.
1. Sales and purchase contracts
Sales contracts and purchase agreements define the terms and conditions for transactions where you sell goods or services to customers.
Key contractual elements of such agreements include:
- Products or services sold — a clear description of the items being purchased;
- Pricing — the price of each product or service along with any discounts or price adjustments;
- Payment terms — how and when the customer must pay including accepted payment methods;
- Quantity — the number of units or amount of services included in the agreement;
- Intellectual property — covers who will own the IP related to the goods or services (you or the customer);
- Warranties — what guarantees or assurances you provide about the good or service;
- Termination — terms for canceling the contract by either party.
Well-drafted sales contracts also protect you from legal risks if issues arise down the road.
Purchase orders, bills of sale, order forms, and supply agreements all fall under the broader category of sales contracts and incorporate the essentials needed to formally govern the sale of goods or services.
Specific types of sales and purchase contracts:
Sales contract
This contract type establishes the foundation for predictable, reputable business relationships between the buyer and seller.
→DOWNLOAD NOW: SALES REPRESENTATIVE CONTRACT TEMPLATE
It defines rights and responsibilities related to orders, deliveries, payments, and other transaction specifics while protecting parties from potential legal risks.
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Purchase order
A purchase order covers official requests from buyers to sellers for products or services.
Such orders specify the types, quantities, and agreed-upon prices of products or services to be purchased, serving as a legally binding offer to complete the transaction.
Bill of sale
Legal documents serving as proof of ownership transfers from sellers to buyers.
Such documents are often used in private sales transactions to protect both the buyer and seller.
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Order form
These forms are standardized documents used by businesses to record customer purchase requests and streamline the ordering process.
They provide essential details about products or services requested.
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Supply agreement
Supply agreements establish long-term arrangements between suppliers and buyers.
Contracts of this type outline terms, conditions, and responsibilities to ensure a steady flow of goods or services at agreed-upon terms.
→DOWNLOAD NOW: SUPPLY AGREEMENT TEMPLATE
2. Service and provider contracts
Service and provider contracts establish the terms and conditions for service delivery such as:
- Description of services — a detailed outline and scope of the services to be provided;
- Payment terms — the cost of the services, payment schedule, and accepted payment methods;
- Duration of the contract — the start and end dates of the service provision;
- Quality standards — the expected quality of service and any performance metrics or benchmarks;
- Confidentiality clauses — requirements for the service provider to keep certain information confidential;
- Termination — terms for ending the contract by either party.
Service and provider contracts serve as a clear framework for the service provision.
This contract ensures both parties understand their obligations and responsibilities.
They also offer legal protection, help to prevent misunderstandings and disputes, and guarantee that the service provider is compensated for their work.
Specific types of service and provider contracts:
Service agreement
Service agreements define the terms and conditions of service provision, including scope, duration, payments, and quality standards.
They are aimed at ensuring clarity and legal protection for both parties.
→DOWNLOAD NOW: OUTSOURCING SERVICE CONTRACT TEMPLATE
Independent contractor agreement
Agreements with independent contractors formalize arrangements with individuals or companies hired to provide specific services.
They identify service providers as independent contractors rather than employees, clarifying their roles and responsibilities.
Consulting agreement
This category of agreements defines the terms and scope of professional consulting services, including deliverables, fees, and confidentiality clauses.
Such contracts facilitate successful client-consultant relationships.
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Vendor agreement
Vendor agreements formalize business relationships between companies and their suppliers.
They address pricing, product quality, delivery schedules, and dispute resolution.
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Franchise agreement
These kinds of agreements define the relationship between a franchisor and franchisee.
It allows the franchisee to operate a business using the established brand, products, and business model.
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Master service agreement
This is a broad category which defines the fundamental agreements between two parties for future transactions or services.
Such agreements are aimed at simplifying further negotiations between the parties.
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Enterprise service agreement
This category consists of comprehensive contracts that govern services provided to large organizations.
They cover aspects like pricing, performance metrics, and compliance requirements.
3. Employer and worker contracts
Employer and worker contracts describe the terms and conditions of a professional relationship between an employer and an employee or contractor. Key elements these agreements should specifically include:
- Job description — a clear set of position duties and responsibilities;
- Compensation — details about the wages, bonuses, or benefits;
- Duration of employment — the start and end dates of the contract, if applicable;
- Non-compete clauses — restrictions on the employee’s ability to work in a similar profession or industry after leaving the company;
- Confidentiality clauses — requirements for the employee to keep certain information confidential;
- Termination — terms for ending the contract by either party.
Employer and worker contracts are essential for establishing employment relationships, setting up clear expectations, and protecting both parties’ rights.
Specific types of employer and worker contracts:
Employment agreement
Such contracts define the terms and conditions of employment for individuals hired by a company.
They usually identify job duties, compensation, benefits, and termination provisions.
Non-compete agreement
These agreements restrict employees from working for competitors or starting competing businesses for a specified period after leaving their current employer.
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This is aimed at protecting sensitive information and trade secrets.
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Confidentiality agreement (often part of employment contracts)
Confidentiality agreements, often referred to as non-disclosure agreements or NDAs, are vital to the employment sector.
These agreements safeguard sensitive information that is exchanged between parties in a business setting.
→DOWNLOAD NOW: CONFIDENTIALITY AGREEMENT TEMPLATE
Independent contractor agreement
An independent contractor agreement describes the nuances of the relationship between a company and a contractor.
Unlike an employee, a contractor works independently, often on a project basis.
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Consulting agreement
A consulting agreement is a contract between a company and a consultant.
→DOWNLOAD NOW: IT CONSULTING AGREEMENT TEMPLATE
It’s used when a business seeks external expertise for specific tasks or projects.
→DOWNLOAD NOW: CONSULTING AGREEMENT TEMPLATE (CALIFORNIA)
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4. Lease and rental contracts
Lease and rental contracts represent the terms and conditions for property or equipment rental or lease, like:
- Property description — a detailed summary of the property or equipment being leased or rented;
- Lease term — the duration of the lease or rental agreement;
- Rent amount — the cost of the rent or lease, including any security deposit and when payments are due;
- Maintenance and repairs — who is responsible for maintaining the property or equipment and handling any necessary repairs;
- Termination — terms for ending the contract by either party.
Lease and rental contracts outline terms, ensuring that the property owner is compensated for the use of their property or equipment.
Specific types of lease and rental contracts:
Lease agreement
This contract category covers the rental of property.
Such contracts cover terms, conditions, and responsibilities of both the lessor (landlord) and lessee (tenant).
Rental agreement
Within this category, you can find contracts that set the terms for renting property, such as apartments or equipment.
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They specify rental periods, payment, and maintenance responsibilities.
→DOWNLOAD NOW: ROOM RENTAL AGREEMENT TEMPLATE
Equipment lease agreement
Similar to lease agreements for domiciles, this category establishes terms for leasing tools or equipment.
Agreements specify conditions for use, maintenance, and possible buyout options.
→DOWNLOAD NOW: EQUIPMENT RENTAL AGREEMENT TEMPLATE
5. Partnership and ownership contracts
These agreements define the business partnership or ownership structure with a set of specific contractual elements such as:
- Roles and responsibilities — a detailed breakdown of each partner’s duties and obligations;
- Profit and loss distribution — how the business’s profits and losses will be shared among the partners;
- Ownership interest — the percentage of the business each partner owns;
- Decision-making process — how decisions will be made and disputes resolved;
- Termination — terms for ending the partnership or changing the ownership structure.
Partnership and ownership agreements help potential partners find common ground and make sure each partner’s interests are legally protected.
Specific types of partnership and ownership contracts:
Partnership agreement
Such agreements define the terms and conditions of a business partnership.
The agreement usually outlines the roles, responsibilities, profit-sharing, and decision-making processes of each partner.
→DOWNLOAD NOW: SIMPLE PARTNERSHIP AGREEMENT TEMPLATE
Joint venture agreement
This category of agreements formalizes partnerships between two or more business entities for a specific project or endeavor.
A contract of this type should detail each party’s contributions and responsibilities.
→DOWNLOAD NOW: JOINT PARTNERSHIP AGREEMENT TEMPLATE
Shareholders’ agreement
Shareholders’ agreements regulate the relationship between shareholders of a company, addressing their voting rights, stock transfers, and dispute resolution.
→DOWNLOAD NOW: SHAREHOLDER AGREEMENT TEMPLATE
Operating agreement
This agreement type includes contracts used by limited liability companies (LLCs).
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They outline the company’s internal structure, management, and distribution of profits among members.
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6. Financial contracts
Financial agreements serve as the backbone of many business transactions by setting out the specifics of loans, repayments, collateral, and other financial obligations. They typically cover:
- Loan amount and purpose — the sum of money being borrowed and its intended use;
- Repayment schedule — the timeline and method for repaying the borrowed amount;
- Collateral — any assets pledged as security for the loan;
- Indemnity clauses — provisions that protect one party against financial loss;
- Guarantee terms — conditions under which a third party guarantees the loan.
Financial agreements are required to ensure that all parties are on the same page regarding their financial obligations and rights, thereby reducing the risk of financial disputes.
Moreover, these agreements provide legal recourse in case of non-compliance or default.
Specific types of financial contracts:
Loan agreement
These agreements outline the terms and conditions of loans, including interest rates, repayment schedules, and default provisions.
→DOWNLOAD NOW: LOAN AGREEMENT TEMPLATE
Promissory note
The promissory notes category covers written promises to repay a debt.
These notes contain essential details such as the amount borrowed, interest rate, and repayment terms.
→DOWNLOAD NOW: PROMISSORY NOTE TEMPLATE
Security agreement
These contracts grant a creditor a security interest in a borrower’s collateral, providing recourse in case of loan default.
→DOWNLOAD NOW: SECURITY AGREEMENT TEMPLATE
Indemnity agreement
Indemnity agreements are often used in high-risk transactions.
They are aimed at protecting at least one of the parties from financial loss, liability, or damage.
Guarantee agreement
Within this category, you can find contracts in which a third party agrees to fulfill the obligations of a borrower if that borrower defaults on a loan or other obligations.
→DOWNLOAD NOW: GUARANTEE AGREEMENT TEMPLATE
7. Licensing and intellectual property contracts
Licensing and intellectual property contracts govern the use, transfer, and protection of intellectual property (IP) rights and typically address:
- Scope of license — the extent to which the licensee can use the licensor’s IP;
- Confidentiality — the obligation to keep certain information secret;
- Assignment of rights — IP rights transfer from one party to another;
- Royalties — the compensation paid to the licensor for the use of their IP;
- Termination — contract-ending conditions.
Licensing and intellectual property contracts are vital in fostering innovation and business growth.
They allow creators to monetize their IP while ensuring that their rights are protected.
These contracts also provide a legal framework for dealing with IP disputes and infringements.
Specific types of licensing and intellectual property contracts:
Licensing agreement
Licensing agreements permit one party (the licensee) to use another party’s (the licensor’s) intellectual property.
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These agreements specify the scope, duration, and any royalty payments.
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Non-disclosure agreement (NDA)
Confidentiality agreements, also known as non-disclosure agreements (NDAs), protect sensitive information shared between parties during the course of business.
The main goal for this agreement type is to prevent the disclosure of sensitive information to third parties.
Assignment of intellectual property rights
The agreements falling into this category involve the transfer of ownership of IP from one party to another.
→DOWNLOAD NOW: INTELECTUAL PROPERTY ASSIGNMENT AGREEMENT TEMPATE
8. Technology and software contracts
These contracts dictate the terms of use, development, and distribution of software and technology products and services.
They are the cornerstone of the tech industry and typically cover:
- Licensing terms — the conditions under which software can be used;
- Development specifics — the details of software creation, including timelines, milestones, and deliverables;
- User rights and restrictions — the permissions granted to the end-user and any limitations on the use of the software;
- Service provisions — the terms for the provision of technology services, including scope, quality standards, and payment terms;
- Termination — the circumstances under which the contract can be ended.
Technology and software contracts protect the rights of developers and service providers, as well as their clients and users, while ensuring that they also understand their obligations and restrictions.
Specific types of technology and software contracts:
Software license agreement
Similar to the licensing agreements, software license agreements govern the use and distribution of intellectual property (in this case, a software).
End-user license agreement (EULA)
The EULA category combines contracts between software providers and end-users, defining the terms of software usage.
→DOWNLOAD NOW: END USER LICENSE AGREEMENT TEMPLATE
Software development agreement
This agreement type details the terms of creating and delivering software.
These terms include milestones, deadlines, and intellectual property ownership.
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Beta testing agreement
Beta testing agreements allow users to test pre-release versions of software or products.
Beta testing agreements usually include the responsibilities of users and feedback provisions.
Technology services agreement
These agreements describe the nuances of providing the tech-related services.
They define scope, deliverables, and payment terms.
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9. Real estate and property contracts
Real estate and property contracts govern the sale, lease, and management of property.
These contracts are pivotal in the real estate industry and typically address:
- Property details — a comprehensive description of the said property;
- Sale or lease terms — the conditions for selling or leasing the property;
- Management duties — the responsibilities of a property manager;
- Financial terms — the cost of the property or lease, payment schedules, and other financial details;
- Termination — the circumstances under which the contract can be ended.
Real estate and property contracts are essential to ensure smooth property transactions and services.
Specific types of real estate and property contracts:
Purchase and sale agreement
Such agreements define the terms for the purchase and sale of real estate (residences or businesses). Among the defined entities are price, terms, and conditions.
Lease agreement
This contract category encompasses both the lease and rental of property.
Such contracts outline the terms, conditions, and responsibilities of all parties involved, including the lessor for leasing or the property owner for renting, and the lessee.
→DOWNLOAD NOW: LAND LEASE AGREEMENT TEMPLATE
Property management agreement
This category covers the agreements defining the scope and responsibilities of property managers in overseeing rental properties.
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Deed of trust
Deeds of trust are documents that secure a loan for real estate, giving the lender assurance should the borrower default.
→DOWNLOAD NOW: DEED OF TRUST TEMPLATE
10. Marketing and advertising contracts
Marketing and advertising contracts define professional relationships between a business and an advertising agency, influencer, or media outlet. Their key aspects are:
- Services to be provided — a detailed description of the marketing or advertising services to be delivered;
- Payment terms — their cost, payment schedule, and accepted payment methods;
- Intellectual property — who owns the rights to the creative work produced;
- Confidentiality — the obligation to keep certain information secret;
- Termination — terms for ending the contract by either party.
Marketing and advertising contracts are essential for managing business relationships and expectations.
They provide a clear framework for the service provision, ensuring both parties understand their obligations and responsibilities.
These contracts also offer legal protection, helping to prevent misunderstandings and disputes, and ensuring that the service provider is compensated for their work.
Specific types of marketing and advertising contracts:
Advertising agency agreement
Advertising agency agreements set out terms for the provision of marketing and advertising services by an agency to a client.
Influencer agreement
These contracts establish the terms of collaborations between influencers and brands, specifying deliverables, compensation, and content rights.
→DOWNLOAD NOW: BRAND AMBASSADOR CONTRACT TEMPLATE
Product placement agreement
Product placement agreements formalize arrangements between companies and media outlets for the promotion of products or services within content.
→DOWNLOAD NOW: JOINT MARKETING AGREEMENT TEMPLATE
Streamline your business contracts with PandaDoc
Business contracts serve as the bedrock of professional relationships, providing a clear framework for various transactions, services, and partnerships.
They are essential tools that help businesses manage their relationships, protect their interests, and ensure smooth operations.
Our comprehensive catalog of business contracts is designed to help you see the big picture while also serving as a foundation for our convenient-to-use template collection.
Find the most appropriate type(s) for your business and modify these free templates to suit your unique business needs.
Once you’ve personalized the template to your business requirements and context, you can manage the full journey of your contract by implementing our all-in-one contract management software.
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