A business agreement in Canada is a contractual document which sets out mutual understanding, terms and conditions between all parties involved in a business arrangement, deal or a transaction.

Business Agreements can also be Partnership Agreements, Indemnity Agreements, Acquisition Agreement Buy-Sell Agreements, Business Confidentiality Agreements, Non-Compete Agreements, etc.

When drafting a business agreement there are few considerations that need to be taken care of as it contains certain terms and conditions that are agreeable by two or more entities:

• The contract will be valid only if all parties concerned, approve all the details pertaining to the agreement. This includes reviewing the final draft and ensuring that everyone signing the contract is fully able to comprehend what they are agreeing upon.
• The purpose of the contract (the exchange of consideration) should be established clearly. All the necessary details are to be taken into consideration and must be duly verified in terms of correctness. Companies may incorporate the suggested changes before the submission of the final draft.
• All the relevant terms and conditions must be thoroughly examined as well and both parties should have a consensual agreement on what the contract will stipulate. A contract that does not suit the needs of both parties will have to be altered to satisfy all the involved parties.
• Clear description is required for a well written contract such as what services or goods are being exchanged.
• One must also consider adding a confidentiality clause, to ensure that the other party does not share the contract information with non-related or other person or entities. The contract should specify how the issue will be handled if a breach occurs.
• The timelines should also be specified in contract, to make each party aware how long the contract will last. If it is a one-time exchange of services, you need to state that it will be terminated upon completion of the transaction. If it is a contract for ongoing services, you may want to state terms for either party to terminate the contract with a suitable duration of notice.
• The agreement itself is a legal document, thus it is also imperative to include some legal clauses into it to make the document binding and enforceable.

SAM LAW specializes in navigating business agreements in Canada and the U.S. If you are looking for help in drafting Business agreement, please schedule a consultation using the button below today.