For some businesses, their business doesn’t revolve around the average consumer. Instead, many businesses serve the needs of other businesses. Whether offering a product or a service that a business needs to conduct their everyday work efficiently, it’s a legitimate business model. While many consumers do not engage in contracts with the business they buy from, businesses may want to consider a contract for their agreements with other businesses.
So, does your B2B agreement require a written agreement? A written agreement, also known as a contract, is more official and usually has elements that make it binding on both parties involved. While these agreements are mostly enforced by state law, an enforceable written agreement usually contains content related to the transfer of real estate, sale of goods valued at or over $500, and contracts that require more than a year to perform. Written agreements are more enforceable for the sheer fact that there is written proof, rather than just verbal, of a contractual agreement.
Verbal contracts have a long history of being difficult to enforce. This would mean a party involved in a contract who does not deliver will often have little to no ramifications compared to one in which a written agreement was constructed. As a rule of thumb, any B2B agreement, including the sale of goods or the promise to deliver services, should have a written contract, as most often, it’s for an amount over $500. These contracts can be very short and compact, or they can be quite long and include specifics pertaining to breach.
Breach of contract occurs when one or both parties do not uphold their contractual responsibility. This can end in unforeseen damages for one or both parties. This is why a contract should be in writing. It can greatly minimize the negative impact on a party in which they are affected by a breach of contract.
Source: FindLaw, “Contracts Basics,” Accessed February 12, 2018