In our last RealDealDocs blog entry, we discussed: assignment agreements, indemnification agreements, and warehouse lease agreements. This week, we will cover three other types of agreements: employment agreements, supply agreements, and royalty agreements.
To review, an agreement can be defined as “a negotiated and usually legally enforceable understanding between two or more legally competent parties. Although a binding contract can (and often does) result from an agreement, an agreement typically documents the give-and-take of a negotiated settlement and a contract specifies the minimum acceptable standard of performance.”
An employment agreement is a document which delineates the terms of the relationship between an employer and employee. If you are hiring a new employee, this document can help form a solid foundation for your business relationship. The document will specify expectations for both parties and may include items such as terms of conduct, employee benefits, vacation time, medical leave, hours, and other issues that may be up for consideration, depending on the business’ needs. An employment agreement might also incorporate arbitration conditions, confidentiality terms and non-compete clauses, provided that separate documents do not address these issues. Some employers may include a progressive disciplinary policy section in the agreement, wherein conditions and repercussions for employee misconduct are explained.
Once signed, an employment agreement is a legally binding contract that can be enforced in a court of law. Often an employer or company makes their offer of employment contingent on an employee signing the agreement.
A supply agreement is a document used in a purchase between a vendor/supplier and a buyer. The document contains terms and conditions regarding the purchase outlining each party’s obligations in the transaction and effective dates of the life of the transaction. The agreement may include terms like a party’s rights to termination of the agreement, what actions constitute breach of contract, as well as the repercussions if either party breaches the agreement. Complex agreements for consumer products may include indemnification for loss, legal actions, damage, and liabilities, as well as conflict of interest statements. An agreement may contain an estimated timetable of delivery of the supplier’s products, as well as a confidentiality clause, site of delivery, and any information regarding the price of goods. If a supplier is offering a discounted rate for purchase to the buyer, the supply agreement typically includes information on the reduced rates. Payment sections of an agreement can include conditions of payment, interest and penalties if payment is late, due dates and other related information.
A royalty agreement is used when a transaction involving intellectual property occurs. It’s a document concerning two parties, typically referred to as a licensor and licensee, granting the licensee the right to use intellectual property for a predetermined length of time. A royalty is a payment made for the sale or use of an intellectual product. Such an agreement may be utilized for the use of a company’s name or trademark, such as if a vendor wanted to display a certain company’s logo on their website or marketing materials. A developer of an invention may sell their product to a corporation and receive a royalty for each sale of their product for a lifetime set by their mutual agreement. The document covers the royalty amount to be paid to the company and what date the royalty should be paid by the licensee. These documents also may include term length of the agreement, the scope of use for the licensee, what constitutes as authorized use, and confidentiality clauses. Indemnification information, particularly on agreements for consumer products, is often included in a royalty agreement as well.
Drafting an agreement from scratch can be a time consuming and daunting task – plus, without input from a qualified attorney, you may be poised to enter into an arrangement this not legally sound or in your best interest. Fortunately, RealDealDocs allows you access to thousands of agreements that have already been used in a myriad of different industries.