Contracts have come to play a key role in most, if not all business transactions. A legally enforceable agreement among parties promising to do or not to do something in exchange for a consideration, contracts come in various forms and serve an array of functions. There are hundreds of types of contracts in existence; however, there is a handful that most of us will certainly come in contact with regardless of our occupation or profession. These include the bill of sale, real estate contracts, lease contracts, operating agreements, and employment contracts.

Bill of Sale

The bill of sale is a legally binding contract used in the sale of a piece of personal property such as a car. It is a written document evidencing the transfer of ownership of a personal or real property from the seller to the buyer. It should include the specific date, particular location, the amount of money or consideration involved, the seller, the buyer, and the subject property which the seller has lawful possession of. The bill of sale may take the form of an absolute bill of sale or a conditional bill of sale.

Real Estate Contract

This contract covers the transfer of ownership of a piece of real estate between different parties. The transfer of ownership can be due to the sale of the property, an exchange, or any other reason. Unlike lease contracts, real estate contracts deal with more permanent transfers of ownership.

Real estate contracts are bilateral contracts since the provisions should be agreed to by both parties involved. It should also clearly identify the parties to the contract (e.g., the seller and buyer of the property), the subject real estate, the purchase price, and the consideration.

Lease Contract

A lease or rental contract covers the temporary transfer of the right to use a property such as a real estate from the landlord or lessor, to a tenant or lessee. The duration of the lease can be for a fixed period or for an indefinite amount of time. The contract should also specify the consideration involved, more commonly referred to as the rent.

Operating Agreement

Operating agreements are common for limited liability companies. It is equivalent to a corporation’s by-laws or a multi-member limited liability company’s partnership agreement. Limited liability companies with a single member use an operating agreement to prove that the company is separate from the individual member, as the agreement typically states the structure that the owner or member has chosen for the LLC. It contains the rights, powers and entitlements of the member or manager, as well as information on capitalization and profit distribution, among others.

Employment Contract

An agreement between the employer and the employee, the employment contract establishes the terms and conditions of an employment relationship. It includes information concerning salary, benefits, and the obligations of both the employer and the employee.