Essential Business Agreements
Essential Business Contracts. Some clients are proactive and prepare written agreements and others prefer a verbal agreement with a good handshake. Both oral and written agreements are legally enforceable, but written agreements help the court by providing a tangible form of the terms of the agreement. To be certain, your foundational corporate governance records should be written. This includes an operating agreement (LLC) or bylaws and a shareholders agreement to address succession planning, rights of first refusal, and handling deadlocks. Once the company is established and has written governance documents, clients should consider creating a contract form with standard terms and conditions. Many clients post their standard terms and conditions online and simply reference the terms in the written agreement with a customer or client. If you have employees or use independent contractors, it is helpful to use employment contracts or independent contractor agreements. Often, an independent contractor will present a written contract to you for consideration. Rarely will an employee offer a contract. That burden falls to you – the employer. You may not need contracts for all of your employees, but they can be very helpful for key employees and higher level marketing employees. At a minimum, you want to use the document to provide some level of trade secret protection and to implement you restrictive covenants program. Some clients produce an employee handbook and/or company policies. These are helpful, but they must be followed and enforced in a uniform fashion. Selective enforcement leads to loss of enforcement. A written lease agreement is a must if you rent space. Never rely on an oral lease unless you like paying money to civil litigators after you have a problem. Restrictive Covenants – for key employees and sales-people, I recommend using non-compete, non-solicitation, and confidentiality agreements. If you have trade secrets and want to use the Illinois Defense of Trade Secrets Act, make sure you provide the statutory disclosures. License agreements are vital for software or intellectual property. Finally, while it is not a contract, if you have key marketing materials, logos or slogans, you should consider filing an appropriate copyright or trademark application. The statutory protections and remedies are valuable, especially if you ever need to go to court. Please remember that copyrights, trademarks, and domain names are all separate matters. Getting a trademark does not reserve a domain name and getting a domain name does not create a registered trademark.