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What terms should be in your business contracts?

On Behalf of | Apr 24, 2023 | Business Law

Contracts are some of the most important and effective tools available to a Maryland business. These agreements outline the rights and responsibilities of two parties that are going to enter a relationship together, whether it is an employer and employee, business and supplier, or other type of arrangement. It is common for businesses to use contracts as a way to establish and protect the relationships they have with their employees.

It is possible to customize an employment contract to suit the needs of the specific business and the details of the relationship between the company and the employee. These agreements should be specific and detailed, and they should minimize the chance of complications and disputes. Regardless of the nature of the company’s operations or role that the employee has in the company, a contract can be beneficial and offer protection for all parties.

The terms of this agreement

There is no one-size-fits-all employment contract. While the details of the contacts can differ based on the individual situation, there are certain terms that are important in most types of employment agreements. These include:

  • Compensation — This includes the amount of the employee’s pay, bonus opportunities and the terms of any form of compensation the employee could receive.
  • Term of employment — The contract should outline how long an employee will work for the company, options for contract renewal and other details.
  • Non-compete or non-disclosure terms — An employment contract should also include terms that outline the protection of important or proprietary information owned by the company.
  • Benefits — These agreements should also specify the benefits that an employee will receive while working for the company, including health insurance, retirement benefits and more.

While these contracts cannot eliminate the possibility of a problem, they can reduce the chance of a complication arising or confusion about the role of either the employee or employer.

Strong contracts benefit everyone

Employment contracts can benefit both the employer and the employee by establishing reasonable expectations and providing clarity. There is significant benefit in having the support of an experienced and knowledgeable professional when creating, reviewing or negotiating these types of contracts. An assessment of the specific company’s objectives, operations and other details can provide insight into how employment contracts can be beneficial and the specific terms they should include.