Understanding business contracts

Dealing with contracts is part of running a small business. You will have a number of business relationships involving some type of contractual commitment or obligation.

You may:

• be a purchaser of goods and services – as a borrower of money, in rental agreements and franchise agreements
• be a supplier of goods and services – retailer, wholesaler, independent contractor
• have a partnering agreement with other businesses – partnerships, joint ventures, consortium.

Managing your contracts and business relationships is very important.

TIP: You should be aware that the majority of contracts entered into will have goods and services tax (GST) implications.