Types of Business Contract Clause

A business contract is legally binding between two or more businesses that are in agreement. A contract is a safe way in which all the parties promise that certain rights and obligations will be fulfilled by each business member who signed the contractual agreement. To put it more easily, a contract is based on a promise that each singing member agrees to satisfy.

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A business contract also offers the business involved a safe space to operate, protecting them if one of those members fails to fulfill the obligations they have agreed upon.

For a business contract to be enforceable, it needs to fulfill specific criteria and include essential elements such as the following:

• Acceptance – Mutual consent, also known as mutual agreement between all the parties involved. 
• Offer – It mentions the request that has been agreed by the parties involved
• Awareness – The acceptance of the request. This needs to be done in writing or orally. 
• Consideration – Include the contractual consideration clause. With this clause, you will be sure that the signing parties respect and deliver, respecting the agreed conditions.
• Capacity – Make sure that all the parties understand the terms and conditions of the contract. You need to see if the parties that are signing the contract understand and have the legal capacity to fulfill the terms and conditions of the agreement. 
• Legality – Make sure the contract is legal. For an agreement to be enforceable, it needs to have jurisdiction in the area you are located or take legal action.

• Indemnification Clause: This is a mandatory clause that must be integrated into your business contract. It also can be encountered as an indemnity agreement. An indemnity agreement stipulates that in the case where an individual commits to indemnify for burden, damage, or any kind of harm caused to the other parties signing the contract. The inclusion of a “hold arm clause” or hold harmless clause in the inbound agreement states that the parties that are involved in the contract are aware of the risks of specific activities such as rock climbing, skydiving, or any other extreme activities, agreeing not to hold the business liable for any harm or damages.
• Force Majeure Clause: This clause is an important detail you might need to add to your business contract. With this agreement, you and the parties involved agree on the existence of unavoidable and unexpected events that might interfere with or damage your points of interest. This can include natural disasters, war, explosions, and government actions that might prohibit any party from performing the contractual obligations.
• Limitations on Liability Clause: This one can also be encountered as the limitation of liability clause and has the purpose of limiting and stating the amount a party has to pay to another party in the case when one member has to suffer due to the business contract.
• Confidentiality: This clause protects information that can’t be disclosed to unauthorized persons. This clause is usually found in sensitive business and employment contracts.
• Copyright clause: This clause needs to be integrated into your contract if your business is using or selling intellectual property. This clause informs the other parties that your IP is protected by copyright and the existing IP laws from your business’s jurisdiction.
• Termination clause – This clause mentions the conditions in which a contract can be ended by any party involved. 
• Privacy Clause – A privacy clause can be encountered in any legal document that processes the terms and conditions of the security and personal information.  This clause protects information that can’t be disclosed to unauthorized persons. It is usually found in sensitive contracts such as business and employment contracts.