The Top 5 Contracts Every Small Business Needs

Running a business means building relationships — with clients, employees, vendors, and partners. Every one of those relationships should be supported by the right legal agreements. Without them, you leave your company exposed to risk, confusion, and even costly disputes.

Here are the five essential contracts every small business should have in place:

1. Non-Disclosure Agreement (NDA)

Before you share sensitive information — with contractors, employees, or potential partners — protect it. An NDA ensures your ideas, client lists, and business strategies stay confidential.

Why it matters: Prevents misuse of your business secrets.

2. Service or Client Agreement

This outlines exactly what you’ll deliver, when, and how you’ll be paid. A clear client contract prevents misunderstandings and sets expectations from day one.

Why it matters: Protects your revenue and defines responsibilities.

3. Independent Contractor Agreement

Hiring freelancers or consultants? This agreement clarifies that they are not employees, and sets terms for payment, intellectual property, and confidentiality.

Why it matters: Helps avoid misclassification issues and IRS penalties.

4. Employment Agreement or Offer Letter

When bringing on employees, you need clear terms for compensation, benefits, and responsibilities. For key roles, a more detailed employment contract may be appropriate.

Why it matters: Builds trust with employees and avoids disputes later.

5. Website Terms of Service & Privacy Policy

If you run a website, these agreements explain how users can interact with your site and how you handle their data. For e-commerce or SaaS companies, these are not optional.

Why it matters: Shields your business from liability and ensures compliance with privacy laws.

Building a Strong Legal Foundation

Having the right contracts in place means fewer surprises and more time to focus on growing your business. At Liermo Law, we offer flat-fee contract drafting and review, so you know your agreements are solid — and your budget stays predictable.