If you have a small business, you might think contracts are too complicated or expensive to require. However, contracts are important for any business — no matter its size. Having a written contract between parties means that everyone knows what they agree to. Including due dates, costs, obligations, disclaimers, and other important details will cut down on confusion and help complete the transaction more quickly. If there is a dispute, your contract is the mechanism to help resolve the issue.
Creating contracts doesn’t have to be as time-consuming as it sounds, though. For simple, generic, documents, you don’t always need a law firm to draft one. This article will provide some contract generator tools to make it easier. Disclaimer: if you ever are in doubt about what a contract contains, whether it is legal, or whether it is the best deal for you, seek legal advice.
What Kinds of Contracts Does my Small Business Need?
The types of contracts your business needs will depend on the type of business you own. You also need to consider where your business is, if you have employees and need an employment contract, and if your transactions occur in person or online. You need written agreements covering every facet of your business — from purchase agreements and lease agreements to photography contracts or service contracts. If your business includes loans or rentals, you need loan agreements and rental agreements every time.
Without a contract or agreement, you open yourself up to a myriad of troubles. You risk late payments or nonpayments. Vendors, clients, or employees could pursue legal action against you. You could even face losing your business.
What is a Contract Template?
A contract template is a generic draft of a contract. It’ll have the basics of what you need and then you can input important details, such as confidential information. In some cases, you can also add things based on your unique business needs.
If you’re new to contracts, starting with a contract template is a good idea. Starting from scratch isn’t just time-consuming; if you make a mistake, you could invalidate the entire contract and open yourself up to trouble. Whether you’re drafting a loan agreement, rental agreement, construction contract, or something else, ensure the contract template covers these components so it’s legally binding:
- Clarity: Use simple language that everyone can understand. Try to avoid the legalese we always think of when it comes to contracts and lawyers.
- Capacity: This means that each party must be able to understand and enter into the contract. Certain groups of people are always ineligible to sign a contract: anyone under the age of 18, people who are intoxicated at the time of signing, and those of an “unsound mind.”
- Contract terms and conditions: You might be familiar with this since it seems like a daily part of life that we agree to terms and conditions. Be as specific as you can — leaving this section open to interpretation will lead to confusion and legal problems.
- Acceptance: This requires three parts. The parties involved must understand the offer, be willing to accept the offer, and accept that acceptance must be shown as an agreement to the conditions.
- Legality: The terms and conditions in your contract must be legal under the applicable laws.
- Exchange: A contract must have an exchange between the parties. This may be money or an action.
- Binding to both parties: Basically, if the contract doesn’t bind one party then neither party is bound. If neither is bound, the contract is void.
10 Tools to Help Draft Small Business Contracts
There are many tools to help you generate a contract quickly and easily. We provide a brief overview of 10 tools to get started. However, keep in mind that most of these are template contract generators and are not considered to be giving legal advice.
Orrick’s focus is on technology, energy, infrastructure, and finance arenas. Several resources are available through their website, including articles, videos, and industry insights. However, the resource you might find most valuable is their startup forms library. Here, you can pick from six categories to find the legal forms that fit your startup needs best, including independent contractor agreements and nondisclosure agreements (NDAs). There is no fee for the service.
Bonsai can help freelancers with everything from creating a proposal, putting together a contract, invoicing, taxes, and more. To put a contract together, use the contract generator question prompts. Once your answers are complete, the site will generate a legal contract for your use. Bonsai also offers e-signing so you and your clients can complete contracts more quickly. You can get started with Bonsai for free.
Shake is offered through a company called LegalShield. You can pick from seven industries to find the template you need, or you can create your own template. The “create your own” option allows you to create a “napkin” agreement by copying and pasting the necessary text into the contract. In addition to creating a contract, you can digitally sign the contract. If you find yourself in a situation where you need to work with a lawyer, Shake has you covered, starting at $17.95 a month.
Docracy keeps a warehouse of legal documents that are “socially curated” by people who create and use them. All templates are free to use, although they do mention on their website that they may add some premium features at a later date that would require a paid account. Anyone who adds a document can choose to make it public. If a document is public, someone else can copy and edit it to fit their own needs.
Coupa allows for efficiency in your contract management. They offer customizable smart templates and libraries of standard clauses. When you create a contract, they will pull from these resources based on your answers to their questions. They also offer workflows that allow you to track and analyze your contracts to know when a contract may need to be modified or terminated. They also offer built-in risk scoring and customizable reporting. If you are interested in Coupa, the first step is to request a demo.
SignNow, which is part of airSlate, is a service where you can collect e-signatures, generate contracts and a bill of sale, and even accept payments. They have solutions compiled by use, industry, or integration. Their pricing plans have three levels: The business plan is $8 a month, the business premium plan is $15 a month, and the enterprise plan is $30 a month.
7. Freelancers Union
If you are a freelancer, the Freelancers Union offers a free freelance contract generator to protect your work and business. FreelancersUnion is free to join. Once you join, you can create contracts through AND.CO. Once created, you can edit the contract. There are also options to create proposals, invoices, time tracking, and more. For more customization options, you can upgrade to the pro version, which is $18 a month.
PandaDoc is focused on helping sales teams work faster with their contract generator, which helps speed up the process through automation. The contract creator can create personalized contracts quickly due to drag-and-drop options and a one-click upload option. You and your client can also use the e-sign option to have everything signed quickly and at one time.
There are four levels for PandaDoc. There is a free e-sign level, the essentials package is $19 a month, and the business package is $49 a month. The enterprise package allows for additional integrations, and you’ll need to speak with a salesperson to join. All monthly plans can also be switched to one annual payment.
JotForm allows you to build a contract from one of their templates, create a form from scratch, or upload your existing template and convert it seamlessly. You can search for templates by type or industry. JotForm has appeal across industries — everything from construction to real estate.
If you are a nonprofit or an educational organization, you are eligible for a 50% discount. JotForm has five pricing levels. The starter is free, bronze is $24 a month, silver is $29 a month, and gold is $79 a month. There is also an enterprise level, and they ask you to contact the sales team for more details.
10. Paper Software
Paper Software is focused on those who have the legal skills to create and analyze a contract. Paper Software is an add-in for Microsoft Word. They also have a version for Mac users called Turner. Adding the software will allow you to format, proofread, navigate through a contract, highlight, and avoid mistakes. The software recognizes what you are doing within a section of the contract and automatically pops up the tools you need on the navigation bar. It will also keep a running to-do list of items you’ve flagged. There is only one pricing level for Paper Software, but you can decide between a $240 annual fee or a $24 monthly fee.
Let ZenBusiness help you manage your small business
Contract agreements come in all manner of length, complexity, and scope — and every business should use them. Look at a contract as a tool, ensuring timely payments and fewer disputes.
A contract template is a good place to start. If you choose to use software that provides online contract templates, make sure they contain the seven elements a contract must have to be binding: clarity, capacity, terms and conditions, acceptance, legality, exchange, and a binding statement.
Are you ready to launch or grow your business? ZenBusiness is here to help. Our experts can help you take your business to the next level with advice and assistance on everything from picking a name to finding the right permits and licenses. Let’s get started today.