Why is a Corporate Agreement Important for Business Today?
Corporate agreements enable your company to:
- Increase market penetration and generate new revenue streams by accessing new markets, sales channel, and customers
- Share risk associated with costs and liabilities across multiple parties
- Improve operational efficiency with defined party responsibilities
- Save time and resources required to build knowledge and expertise for optimal market operation
- Leverage untapped resources and technologies, shared by the partners, to expand market reach
Why is Corporate Agreements Important for an Event Tomorrow?
Corporate agreements are important for an event tomorrow, as they help:
- Evaluate current and future business ventures
- Leverage your partners’ existing distribution channels, customers and technology
- Evaluate third-party liabilities and contribution and profit (loss) sharing agreement
- Provide supplementary business offerings of your company and its partners to their clients
Pros of Addressing Corporate Agreements
- Reduced risk of disputes by clearly defining roles and responsibilities, contributions, authority, profit (loss) sharing, and pay-outs of each party
- Availability of a dispute resolution processes and penalties for any breach of the arrangement
- Flexibility to add, or remove partners, and change roles and responsibilities
- Increase in market reach via new distribution channels and acquisition of new customers
- Resource saving by leveraging additional resources, technology, contacts, and expertise provided by partners
Cons of Not Addressing Corporate Agreements
- Exposure to legal disputes caused by ambiguities in rights and obligations of the parties
- Restricted opportunities to expand business due to undefined scope
- Increase in inefficiencies as profits (losses) sharing, responsibilities, and contributions are not defined
- Confined ability to vertically integrate your business and achieve economies of scale.
Corporate agreements FAQ
What is the difference between a contract and an agreement?
A contract is a legally binding document that contains specific terms and conditions agreed upon by all parties involved, enforceable by law. An agreement, on the other hand, is a mutual understanding or arrangement between parties, which may or may not be legally enforceable.
What makes a contract legally binding?
For a contract to be legally binding, it must contain certain essential elements: an offer, acceptance, consideration, legal capacity of the parties, and an intention to create legal relations. Additionally, the contract must be free from anything that would make it void, such as fraud, duress, or undue influence.