How much does a business contract cost? A business contract is a legally binding agreement between two parties in which the parties agree to the buying and selling of goods or services.
Business contracts can be oral contracts, but they are often written and signed by the parties involved in the contract. A business contract must contain specific information like an offer, acceptance, and consideration to be legally binding and enforceable.
When considering a business contract, many people choose to have an attorney draft the agreement to ensure it is legally binding. The first question most people ask is how much it will cost. Let's explore this question and review some general information about business contracts.
How Much Does a Business Contract Cost?
Based on ContractsCounsel's marketplace data, the average cost for a project related to a business contract is $660.00 [1].
Business contract cost depends on many variables, including the location of the businesses, the complexity of the document, and any additional terms and conditions that the parties want to be included in the contract.
What is a Business Contract?
Business contracts, when appropriately drafted, are legally binding agreements. These types of contracts are used by all kinds of businesses across all industries but are very common in sales. Any time two entities work together and agree to buy or sell products or services, a business contract is formed even if it isn't in writing.
Business contracts can range from straightforward agreements to very in-depth and complicated contracts. Getting help from a business contracts lawyer to draft a business agreement is highly encouraged.
Business contracts must include specific information, and if prepared incorrectly, the contract may not hold up in court.
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What's Typically Included in a Business Contract
Terms included in a business contract will vary depending on the needs of each party and the products or services that are being provided. Although agreements can differ significantly from very simple to very complex, it is common to find the following items in a business contract:
- Parties involved in the contract. Every business contract needs to include information about the parties involved in the contract. Parties can be individuals or entities like a limited liability company or a corporation.
- Description of services or goods exchanged. Business contracts typically involve exchanging services or goods for payment or trade. The contract should lay out all terms and conditions of what services or goods are being performed and each party's obligations.
- The payment amount and due date. A business contract must include the agreed-upon payment for goods or services and the date the payment is due. Some contracts specify that payment is due upon receipt, while others may provide a time period to make the payment.
- Duration of the contract. Some business contracts expire after services are performed; however, the parties may agree to extend contracts for a specified term.
- How to handle breach of contract or missed deadlines. A business contract should always include damages and remedies in the event there is a breach of contract.
Types of Business Contracts
Business contracts are very prevalent and are constantly used in all industries. Some examples of business contracts include:
- Bill of sale
- Employment agreement
- Licensing agreement
- Promissory note
- Business partnership agreement
- Indemnity agreement
- Commercial lease
- Construction contract
- Joint venture agreement
Many people don't realize that something as simple as walking into a store and purchasing an item effectively creates a business contract between you and the business.
Examples of Business Contract Projects
Business Contract Drafting
Many people will hire a knowledgeable business contract lawyer to help consult and draft a business agreement that fits their needs regarding their services, expected payment, and terms and conditions.
Business contract drafting usually involves a consultation with the parties to find out what terms they want to include in the agreement. The attorney will then draft a contract that implements the desired terms. Business contract costs can vary based on how complex the agreement needs to be.
Business Contract Review
Sometimes, two parties may already have a business contract or have started drafting an agreement from a template. In this case, they will want an experienced attorney to review their agreement before signing a business contract.
Reasons you may need to find a lawyer to review a business contract include:
- Ensuring it meets all legal requirements in your state
- It contains proper language and terms that protect both parties
- It will be legally enforceable in court in the event of a breach
Business Contract Disputes
Even though a business contract is a legally enforceable agreement, like all contracts, there are several ways to challenge the validity of a business agreement if there is a dispute.
Various requirements must be met to make a business contract valid. These include:
- There was not adequate consideration
- The agreement was signed under duress
- A party misrepresented themselves or their services in the contract
Adequate consideration is very important in a business contract because that is what separates a business contract from a gift.
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How Much Does it Cost to Draft a Business Contract?
Drafting a business contract comes with expenses because it requires the time of a licensed lawyer to complete the project.
According to ContractsCounsel's marketplace data, the average business contract drafting costs are $750.00 across all states and industries.
How Much Does it Cost to Review an Existing Business Contract?
If you need a business contract reviewed, hiring a lawyer to review your document will come with fees. Your attorney will need to read over the contract to analyze the terms and make sure the document is legally enforceable.
ContractsCounsel's marketplace data shows the average business contract review costs to be $500.00 across all states.
How Do Lawyers Charge for a Business Contract?
Business lawyers charge for services in various ways; however, hourly rates and flat fees are the most popular payment structures.
Hourly Rates for Business Contracts
Hourly rate fee structures are one of the most common fee structures for contract lawyers. Using an hourly rate, an attorney will bill a client at a set amount per hour for working on the project.
An hourly rate payment ensures that the lawyer is fairly compensated for all their time working on a client's case.
The marketplace data for ContractsCounsel shows the average hourly rate for a business contract lawyer ranges from $225 - $300 per hour.
Flat Fee Rates for Business Contracts
Flat fee rate structures are becoming more common for individual legal projects like drafting a contract. In a flat fee payment structure, lawyers will quote a flat fee price to the client for working on the project.
Flat fee rates are preferable for clients because they know exactly how much they will be spending for legal services and won't be surprised by a large hourly rate bill. Clients should be aware of what is included in the flat fee rate to avoid hidden costs for services like second drafts or reviews.
ContractsCounsel's marketplace data shows the average flat fee rate for business contract costs to be $660.00.
Get Help with a Business Contract
Do you need help with a business contract project? If so, post a project in ContractsCounsel's marketplace to receive flat fee bids from business contract lawyers to handle your project. All lawyers on the ContractsCounsel's platform are vetted by our team to make sure you are provided with top-tier service.
