Setting up your small business can be exciting and stressful. Finally getting around to launching your brand has more than likely taken a considerable amount of research and planning. You will have spent time and money on product development, marketing, and initial branding.
How much time have you spent drafting the necessary contracts for employees, vendors, as well as service contractors? Many first time business owners often outsource this task to the experienced contract lawyers Melbourne has available.
Contracts are Essential for Every Start-Up
Anytime a business does a transaction (for goods or services) with an individual or another company, there’s the risk of something going wrong. This means it’s not only important to have the right lawyer on your team, but also the necessary contracts to safeguard you and your business. We’ve drawn up a list of the common contracts every start-up should consider.
Company Service Contracts
Service contracts are important because they outline the precise functions your company will provide. This document should also highlight the functions the business expects to receive from other organisations.
For the most part, these contracts also include creative and specialised contracts, which can include any of the following:
- Accounting services contracts
- Computer service contracts
- Editor and freelance writer contracts
- Graphic design contracts
A typical example of this involves outsourcing your IT or accounting to external companies. You will need these contracts in place to ensure that you get the services at the agreed rates within the specified time frame.
Employee Contracts
It’s important to have contracts in place for all your full-time or salaried employees. These agreements specify the rights and obligations of each job function. This contract acts as a guideline that lets every employee know what’s expected of them.
Important aspects such as salary, leave days, sick days, and working hours should be detailed in these contracts. Agreements should be signed, and each employee should have a copy. Having this in place will ensure that you are prepared for any employee discrepancies regarding overtime, infringements, or any other HR or payroll type issues.
Non-Compete Agreements
Anyone working in your business can resign at any time and use information and ideas seen in your business to start their own company. You can avoid this by having every employee or partner sign a non-compete agreement.
The criteria in these types of agreements stipulate that they may not compete against you when they leave your employ. This is especially important when you’re working with client data, creative designs and potential patents.
Non-Disclosure Agreements
As the name implies, a non-disclosure agreement, or NDA, means that an employee may not divulge any of your proprietary information to anyone outside of the company. For instance, if you commission an external graphic designer to do a series of designs for your company, an NDA prevents them from using or sharing that same design for their purposes.
Provisional Patent Applications
Imagine inventing a product in your company and having the idea stolen by an employee or partner who then markets the product as their own. This happens more often than new business owners realise.
Protect your company against this by completing a provisional patent application. You and your designers will be able to use the “patent pending” notice, which proves ownership of the idea. This document is valid until the official patent filing date is approved.
Release of Liability Agreements
This agreement is especially important if employees, vendors, suppliers, and customers are coming to your premises. Since there’s always the risk of injury, this document releases your company from any liability for any injury.
This agreement will also cover your business for being liable when a contractor gets hurt on your business premises while working there. An example of this could be an aircon service technician falling off a ladder while repairing your HVAC unit. The company they work for will then be liable for the cost of the injury.
Contractual Claims That You May Need Assistance With
Your contract lawyer will also be able to assist you with instances where your company is facing litigation or having to deal with contractual claims. These types of claims happen when one party within an agreement or contract believes that the other party hasn’t honoured their end of the arrangement.
Some of the contractual claims that you can get assistance with include the following:
- Claims for rectification
- Claims for equitable remedies
- Claims for performance
- Claims for breach
- Claims for damages
- Interpretation of contracts
- Termination and discharge of contracts
Final Thoughts
If you’re setting up your small business, it’s important to liase with a contract lawyer as early as possible. This will ensure that you have the necessary contracts in place, reducing the risk of creating cause for possible litigation. No matter how small your business is, adopting the correct legal processes will give you peace of mind that you can focus all your energy on generating the necessary profits.