Business Contract: Types and Characteristics

business contract

A business contract, of whatever type, is a legal act that, as its name indicates, has a business nature. In general, these contracts refer to business acts. It generates rights and obligations of a business nature and that are reciprocal between both parties to the operation. Like the rest of the contracts, they are regulated by the Business Code.

There are different types of business contracts, which can be applied in practically any area of ​​business operations imaginable. Here are some of the most important ones.

The business contract: Main types of a business sale contract

A sale is a contract by which one of the parties agrees to deliver a good or provide a service to the other, who pays it in money. Unlike a civil sale, the business is defined by the following characteristics:

– It is about a movable good.

– The aim of the operation is to sell, exchange or lease.

– It has a lucrative purpose.

– It occurs between a merchant and his supplier. Typically, the merchant purchases merchandise for his business that he will use to provide his service later.

Business swap contract

A swap is defined as the direct exchange of one good for another without money involved, with few exceptions. This good can be real estate, business or of any other kind.

These types of contracts are usually of a civil nature, although there is also a business swap contract. To be of this last class, it has to meet the same requirements as that of business sales, which are basically summarized in that it must be used for a business operation.

Business land transport contract

Within the world of the business contract and its types, the transport contract is one by virtue of which one of the parties is obliged, in exchange for a price, to drive from one place to other passengers or other goods, either by land, by canals or navigable lakes or rivers, and deliver them wherever they are directed.

Its use is directly related to a business contract of other types and to the merchant-supplier relationship. Since, through this contract, the supplier delivers its merchandise to its customers under the established terms.

It can also be applied to the transportation of people. For example, when a travel agency offers transportation from the airport to the hotel on the latter’s behalf.

Insurance contract

Insurance is a contract, called an insurance policy, by which an insurance company is obliged, by charging a premium and in the event that the event occurs whose risk is covered, to indemnify within the limits agreed to the insured for the damage suffered.

The wide variety of coverage that is currently underwritten makes the insurance apply to both civil and business contracts. Thus, there is insurance for vehicles that are used in a private way, but also for the transport of goods, for the rental of homes and business premises, etc.

Also Read: What Happens When You Default on A Business Loan?

Business contracts of promissory notes

The promissory notes, and in general any discount of business bills, constitute a business contract of a special type. They are credit titles and, as such, create obligations for both the drawer and the beneficiary, which are duly regulated in special laws.

Specifically, the discount of promissory notes is one of the so-called active operations through which it is the bank that grants credit to its customers by discounting their invoices.

Partnership contract

The business partnership contract is one by which two or more people, called partners, are thankful to put in a common fund certain goods, industries or some other means to carry out a business activity and obtain profit, with the aim of distributing between them the earnings. It is the legal form through which all kinds of companies are started regularly.

There are numerous classes of companies that are constituted through a business contract of this type.

These are some of them:

– Anonymous society

– Limited Liability Company

– Individual Limited Liability Company

– Limited Partnership by Shares

– SL unipersonal

– Collective society

Business association contract or participation accounts

The association contract is one by which two or more people take an interest in many business operations, whether instantaneous or successive, that one of them must execute in his own name and under his personal credit, but rendering an account and dividing with his associates. gains or losses in the agreed proportion.

Currently, the association contract is practically not used, since it has been replaced by the partnership contract, which we have explained in the previous point.

Loan contract

The loan is defined as a contract, civil or business, in which one of the parties delivers to the other a certain number of fungible things in charge of restoring many others of the same kind and quality.

Although in its formal definition all kinds of things that can be consumed can be lent, at present, a business contract of this type is used almost exclusively for the granting of bank loans, through which an entity usually delivers an amount determined amount of money with the promise, by the recipient, of its return within a specific period of time and in exchange for the payment of interest.

Deposit contract

This is an exclusive contract for banking entities. In ancient times, the bank was a simple custodian of its customers’ money. However, current contracts serve other functions, such as placing money orders and transferring funds. These operations lead to the creation of a bank checking account, the writing of checks, and other operations consisting of the issuance of credit titles and transferable securities.

In reality, bank deposits and all the services offered by a bank involved in themselves a complex system of contracts (bank contracts), which are inherent to business life and which are still the subject of wide debate today due to their consequences and direct effects on this and on economic activity.

These are the different types of business contracts that exist, their characteristics, and their scope of application; documents that, in today’s complex and diverse economic framework, all companies need to know. Nexus Contracts provides the best business contract solutions that can be applied in practically any area of ​​business operations possible.

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