Contract Agreement Example: Templates & Best Practices

Some agreements, like service agreements, are legally binding. Others, like memorandum of understanding are not. 

While both serve a purpose, if your goal is to protect your business, you should focus on the legally binding ones. 

So, what legally binding agreement examples should you curate?

Different agreements come into play at various stages of your business, and you may not need all of them immediately. The key is to identify the ones relevant to your business now, prioritize them, and tackle others as the need arises.

This article covers 10 essential legally binding agreements and the key elements each must include to safeguard your business. Not all may apply to you, but use this as a guide to determine which ones matter most.

10 Common Agreement Examples to Safeguard Your Business

Before we dive in, here’s an important distinction: Most legally binding agreements are contracts (hence, also called contractual agreements), meaning they follow a structured format and meet key legal elements like offer, letter of acceptance, and consideration. These are governed by contract law.

However, some agreements like the memorandum of incorporation (the only one in this category on our list) aren’t contracts in the traditional sense. They’re legally binding because statutory law requires them, not because two parties negotiated terms.

Now, let’s get into the list:

Supplier agreement

Does your business rely on third-party vendors to provide goods or services that you sell, use in production, or incorporate into your operations? You need a supplier agreement. It ensures you get what you’re paying for on time and in the right condition. 

Here’s what a supplier agreement should cover.

First, scope of supply. Clearly define what’s being provided, including quality, quantity, and any industry standards it must meet. 

Pricing and payment terms should state costs, bulk discounts, and when payments are due (upfront, installments, or on credit). You could include penalties for late payments.

Delivery terms are critical. Set clear deadlines, define acceptable delays, and establish responsibility if something goes wrong in transit. Quality control is just as important. Your agreement should let you inspect goods and reject anything defective, with a process for replacements or refunds.

Unexpected supply chain issues can happen, hence include a force majeure clause to help cover disruptions like natural disasters or supplier failures. 

Finally, outline termination terms, including how either party can exit the agreement and whether it renews automatically or needs renegotiation.

Template example:

Employee agreement

Don’t fall into the trap of informal hiring just because you trust someone or have a family connection. As long as they work full-time for you and you pay them, setting clear expectations with an employment agreement is a must.

The core part of this agreement is the job role and responsibilities. Spell out what the employee is expected to do, their position, and whom they report to. 

Clearly state the compensation and benefits, including salary, bonuses, allowances, and any perks like health insurance or paid leave.

Also include work hours and flexibility, whether full-time, part-time, or remote. Define termination terms, covering notice periods, reasons for dismissal, and any severance pay, too. 

To prevent issues down the road, add confidentiality and non-compete clauses, ensuring sensitive business information stays protected.

Template example:

Partnership agreement

Do you share ownership of your business with a co-founder or partner? If so, you need a partnership agreement. You can consider it a business prenup, laying out the rules so everyone knows what to expect. Without one, even the best partnerships can turn messy when there’s a misunderstanding around money or responsibility.

The first thing to nail down is ownership and profit-sharing. Who owns what percentage of the business? How are profits (and losses) divided? Don’t assume a 50/50 split unless it’s explicitly stated. One partner might be investing more money while the other brings industry expertise. It all needs to be in writing.

Next, define roles and responsibilities. Who’s in charge of what? Does one partner handle operations while the other focuses on sales? Without clear expectations, resentment can build when one person feels like they’re doing all the heavy lifting.

No matter how well you get along, disagreements are inevitable. That’s why a dispute resolution clause is key. You could try mediation first (get a neutral person to settle the case) or go straight to arbitration (a neutral arbitral body). Having a plan can keep small issues from turning into full-blown legal battles.

Finally, think about the future. What happens if a partner wants out? Can they sell their share to an outsider, or do the remaining partners get first dibs through a buyout? A solid exit strategy and dissolution plan ensures no one gets stuck in a bad situation or worse, leaves the business in chaos.

Template example:

Lease agreement 

A lease agreement sets clear terms for renting assets to prevent disputes over terms like maintenance and usage. Even if you’re not in the business of leasing, as a business owner, you’ll likely find yourself renting something: an office space, machinery, or even company vehicles. That’s why it’s crucial to understand what goes into a lease agreement before signing.

What to look for depends on what you’re leasing, but in general, a lease agreement should include a clear breakdown of costs. Beyond the base rent, check for additional fees like maintenance, utilities, insurance, property taxes, etc. However, some leases bundle these costs into a single payment, but you must clarify if your agreement lacks a breakdown.

The agreement should also state the maintenance responsibilities. Do you or the owner handle the repairs and upkeep? Unclear terms can lead to unexpected costs.

Watch for usage restrictions. Some landlords limit modifications, subleasing, or even business activities. For vehicles or equipment, there might be mileage limits or wear-and-tear clauses.

Lastly, review the termination clause. Can you exit early? Are there penalties? Knowing your options upfront prevents problems later.

Before signing, take your time. Read the fine print, ask questions, and negotiate where possible. A lease agreement may seem routine, but signing a bad one can put unnecessary strain on your business.

Template example:

Memorandum of incorporation (MOI)

If you registered your business as a limited liability company (LLC) or corporation, an MOI isn’t optional, it’s legally required under statutory law. It sets out the rules that govern the business, ensuring clarity on ownership, decision-making, and shareholder rights.

Without it, your business structure would not be legally recognized, making disagreements hard to resolve. 

One of its key elements is share structure; who owns what percentage of the company and how to transfer shares. It also defines director roles and responsibilities, outlining their authority and limits to prevent conflicts.

A strong MOI should include decision-making processes, specifying how to approve major business choices, whether through board resolutions or shareholder votes. Dispute resolution clauses help prevent internal conflicts from escalating into legal battles.

Since companies evolve, the MOI should also cover amendments and dissolution, detailing how to make changes and what happens if the business shuts down.

Non-disclosure agreement (NDA)

You don’t want your trade secrets stolen or client data floating around, do you? Whenever you need to share sensitive information, pair it with an NDA to prevent unauthorized disclosure or misuse. For example, before pitching an innovative idea to an investor, you can ask them to sign an NDA. 

At its core, an NDA must clearly define what’s considered confidential; not everything shared in a business relationship qualifies. It should also outline who’s bound by the agreement and for how long. Some NDAs last indefinitely, while others have an expiration date.

Equally important are the permissible uses of information. If disclosures are necessary (such as to employees or legal advisors), the agreement should specify those exceptions. A breach clause lays out the consequences of violating the agreement, whether through fines, legal action, or other penalties.

Template example:

Service agreement

If you outsource work, provide freelance services, or consulting, you’re familiar with issues like scope creep, delayed payments, or missed deadlines. A service agreement prevents these problems by defining the terms between a service provider and a client, ensuring both sides know what to expect.  

When drafting one, pay attention to the scope of services—what’s being delivered, how, and when. Vague terms lead to scope creep, so it’s best to be specific. Also clarify payment terms, including rates, invoicing schedules, and penalties for late payments.

A strong agreement covers liability and dispute resolution. That is, who’s responsible if things go wrong and how to handle conflicts. If confidential information is involved, a non-disclosure clause can protect sensitive data.

Finally, the termination clause should spell out what happens if either party wants to end the agreement early. 

Template example:

Sales agreement

There’s a service agreement for service providers, and, of course, a sales agreement if you’re in the business of buying and selling products. This helps prevent costly disputes over pricing, delivery, or product quality.

A key aspect is the product description. It should cover what’s being sold, in what quantity, and at what quality standard. 

What if the goods don’t meet expectations? The agreement should specify warranties and return policies to handle replacements or refunds.

Payment terms are also essential. Will the buyer pay upfront, in installments, or on credit? Are there penalties for late payments?

Since business relationships don’t always go smoothly, a dispute resolution clause can help resolve conflicts without escalating to lawsuits. 

Template example:

Licensing agreement

A licensing agreement is like a rental agreement for intellectual property. You’re letting someone else use your creation, but you still own it. As a business owner, you can license out trademarks, product formulas, brand names, software, patented technology, or creative works. 

Some businesses, like McDonald's, thrive on licensing their brand and systems, while others use it as an additional revenue stream. If you're considering this for your business, a licensing agreement is essential to protect your rights and define the terms clearly.

When drafting a licensing agreement, the first step is to state what’s being licensed. Spell out exactly how the licensee (the person you’re permitting) can use it and whether it’s an exclusive (you only permit one person) or non-exclusive right (you can give the right to multiple people).

Payment terms vary. Some agreements involve a one-time fee, while others use royalties based on sales. It’s crucial to define how and when you want to be paid.

Usage restriction clauses also matter. Your agreement should state if the licensee can modify the intellectual property, or sublicense it to others.

Finally, every good licensing agreement includes duration and termination terms. How long does the license last? What happens if either party wants to exit early? 

A well-drafted agreement protects both parties while ensuring your intellectual property is used as intended.

Template example:

Settlement agreement 

A settlement agreement is the business world’s way of calling a truce. Instead of battling it out in court, both sides agree to certain terms to resolve a dispute. Consider this agreement when misunderstandings arise to prevent the financial and reputational toll a legal battle can have on your business. 

These agreements come in different forms, depending on the situation.

One is a mutual release agreement. It’s common when both parties drop all claims against each other and walk away without further obligations. In contrast, a structured settlement involves one side making payments over time instead of a lump sum. Then there’s a confidential settlement, which ensures that details of the dispute and resolution stay private; it’s often used in high-profile cases.

Regardless of the type, a good settlement agreement should cover the scope of the resolution such as what’s being settled and whether any future claims are still possible. 

Spell out payment or action terms. A non-disparagement clause might also be included to prevent either party from speaking negatively about the other.

Template example:

How to Automate Bulk Agreement Creation to Save Time and Cost

Knowing the agreements you need is one thing, actually creating them is another. Let’s be honest: drafting agreements is time-consuming, repetitive, and boring, especially when you need multiple versions. It’s easy to get discouraged or push it aside for more urgent business tasks.

Even if you delegate it to your team or outsource it, wouldn’t their time be better spent on higher-value work?

What if you could automate the process and keep your business protected without sacrificing time or money?

With a contract automation tool like Docupilot, you can. A one-time setup is all it takes. Once your workflow is in place, Docupilot handles everything from agreement creation to approval.

Sounds interesting? Let’s set it up in five simple steps: 

1. Create a Docupilot account

Start by signing up to Docupilot for free. Once logged in, you’ll be taken to your dashboard, where you can manage all your document automation tasks.

2. Create a template

Templates are the backbone of your automation process. To create one, click "Create Template."

Docupilot offers different ways to set up a template. You can either choose a template from the library, import an existing one, or use the AI Template Builder to generate an agreement from scratch.

Using the AI Builder, let’s create an employment agreement as an example. Click "Build with AI," then enter a template name and description and click “Create Template.”

You’ll see three suggested prompts. Choose one or type your own.

After that, the editor will display a draft of your agreement.

At first glance, the AI-generated agreement might seem brief, but don’t worry—you can refine it. Use the left panel to enter prompts like "Make more comprehensive" or "Add context."

If you want to adjust specific clauses, highlight the relevant section and make your changes.

To further refine the document, use the editing tools in the top panel.

3. Add merge field for customization 

Merge fields (the words inside curly brackets like {Name} or {Amount}) allow you to customize agreements with variable data. Docupilot’s AI pre-fills many of these fields, but if you need to add more, there’s a simple way to do it. 

Click the curly bracket icon in the left panel. Under "Type," select "Token." Enter the name of the data field, then place your cursor where you want it inserted in the agreement and click "Insert."

Once added, the merge field will automatically pull data into the agreement, saving you from manually entering details every time.

4. Automate bulk agreements generation 

To automate the creation of multiple agreements at once, set up Bulk Merge.

Click "Bulk Merge" and choose how you want to generate your agreements.

• Capture Form: Generates a form link where users can enter details, and Docupilot automatically fills the agreement. Best for generating a small number of agreements

• Bulk Upload: Upload a CSV file with your agreement data (e.g, a list of client names and details), and Docupilot will generate multiple agreements instantly. Perfect for handling large batches

• Integrations (Zapier or Make): Connect Docupilot to tools like Google Sheets, HubSpot, or Airtable. For example, if supplier details are stored in Google Sheets, Docupilot will receive a trigger to automatically generate an agreement whenever a new supplier is added

Whichever method you choose, here’s the result you’ll generate.

5. Automate the signing process

Generating agreements is only half the job, getting them signed is just as important. Docupilot integrates with e-signing tools like DocuSign and Yousign, allowing you to automate the entire signing process.

To set this up, go to the "Delivery" tab and select your preferred e-signing tool.

Fill in the required fields to configure the process. 

Once set, recipients will be automatically notified to review and sign the agreement, eliminating back-and-forth emails and delays.

Start Protecting Your Business With Agreement 

Running a business comes with risks, but the right agreement examples safeguard your operations, prevent disputes, and protect your financial interests.

However, drafting agreements manually can be tedious, time-consuming, and prone to errors. With Docupilot, you don’t have to waste valuable resources creating multiple agreements from scratch. Automating your workflow lets you focus on growing your business while ensuring that every deal, partnership, and transaction is legally sound.

Want to try out Docupilot? Sign up for a 30-day free trial. No credit card or any form of upfront commitment.