Definition of a Business Agreement

by Priti Ramjee; Updated September 26, 2017

A business agreement is the statement, either oral or written, of an exchange of promises in business. For example, in business two parties may have a written agreement not to interfere in each other's business. Or, they may have a verbal understanding between management and employees. As long as the business parties are in harmony of opinion, they are considered to have a business agreement.

Joint Venture Agreement

A contractual Joint Venture Agreement is an agreement between two or more business partners on a business strategy on a project. All partners generally agree to share the profits and losses through their common shareholdings. The joint venture agreement outlines what is expected of each party.

Mutual Non-disclosure Agreement

A Mutual Non-disclosure Agreement is an agreement of two parties agreeing to maintain the confidentiality of information that they share as it relates to business discussions. Signing this agreement would prohibit an employee from discussing trade secrets of a former employer and the former employer from discussing the former employee's salary and other information.

Operating Agreement

An Operating Agreement is an agreement between an organization's members governing the operations of the organization and members' rights. It allows you and your partners to structure the financial operations and working relationships in the best interest of your business. In your operating agreement, the owners identify their percentage of ownership, share of profits or losses, rights and responsibilities.

Independent Contractor Agreement

An independent contractor is a person hired to work for a business who is not an employee of the business. An Independent Contractor Agreement does not necessarily require the document to be in writing. It can be an oral contract and still be legally binding according to the law. However, oral agreements can lead to misunderstandings. It is better to have a business agreement outlining what the independent contractor's duties are, the amount of pay and how a dispute will be handled.