At Persona Finance, we work with businesses across the UK, EU, and UAE to create, review, and manage contracts that safeguard operations and support growth. This guide explains which contracts your business needs, why they matter, and how to ensure they are drafted correctly from the start.
What Makes a Contract “Essential”?
An essential contract is any legally binding agreement that underpins a key business relationship or operation. These contracts define your rights, obligations, and protections, ensuring clarity and fairness between all parties involved.What is an essential contract for a business?
An essential contract is a written agreement that protects your commercial interests, clarifies responsibilities, and helps enforce your rights in case of a disagreement or breach.
Essential contracts are particularly important in situations that involve:
- Significant financial transactions or ongoing obligations.
- Access to confidential or proprietary information.
- Relationships with employees, clients, or suppliers.
- Intellectual property or data processing.
The Core Contracts Every Business Should Have
Each of the following contracts plays a vital role in managing different aspects of your business. Together, they form the foundation of strong governance and compliance.1. Service Agreements or Terms & Conditions
If your business provides products or services to clients, you need a service agreement or detailed terms and conditions. These documents outline exactly what you deliver, how payments are made, and what happens if things go wrong.Key clauses include:
- Scope of services and deliverables.
- Payment structure and timelines.
- Termination and notice periods.
- Liability and dispute resolution.
2. Employment Contracts and Contractor Agreements
Employment contracts define the terms under which your staff work. They cover hours, pay, duties, confidentiality, and termination rights.For freelancers or consultants, a contractor agreement ensures there is no ambiguity about tax status, deliverables, or intellectual property ownership.
Without these agreements, your business may face disputes, unexpected liabilities, or even HMRC challenges over employment classification.
3. Non-Disclosure Agreements (NDAs)
Whenever your business shares confidential information — with suppliers, investors, or partners — you should have a non-disclosure agreement in place.An NDA protects your ideas, data, and trade secrets by setting clear rules on how information can be used or shared.
Typical provisions include:
- Definition of “confidential information.”
- Permitted use of shared data.
- Duration of confidentiality obligations.
- Procedures for return or destruction of information.
4. Supplier or Procurement Agreements
When dealing with manufacturers, vendors, or distributors, a supplier agreement ensures reliability and accountability. It governs how goods or services are provided, delivered, and paid for.Important clauses include:
- Product or service specifications.
- Delivery schedules and acceptance procedures.
- Pricing, payment, and late-fee terms.
- Warranties, liability, and termination conditions.
5. Shareholder, Partnership, or Joint-Venture Agreements
For companies with more than one owner or investor, a shareholder or partnership agreement is crucial. It clarifies how decisions are made, profits distributed, and exits handled.Common inclusions are:
- Ownership percentages and voting rights.
- Roles and responsibilities of each party.
- Procedures for selling shares or resolving deadlocks.
- Dividend and profit-distribution rules.
6. Website Terms, E-Commerce Terms, and Privacy Policies
In the digital economy, your online presence also needs legal protection. Website terms and privacy policies are essential for compliance with GDPR and consumer protection laws.These documents outline:
- User obligations and acceptable behaviour.
- Refund and cancellation rights.
- Data handling and cookie use.
- Limitations of liability.
Key Clauses to Get Right in Every Contract
Even the simplest contract should include certain core clauses that protect both parties and prevent misunderstandings.- Scope of work or services: Defines what is and is not included.
- Payment terms: Details fees, methods, and deadlines.
- Term and termination: Specifies how long the contract lasts and how it can end.
- Intellectual property: Clarifies who owns work or materials created.
- Liability limitation: Caps financial exposure in case of loss or damages.
- Confidentiality: Ensures privacy and data protection.
- Dispute resolution: Defines how issues will be resolved, whether through mediation, arbitration, or court.
Common Mistakes Businesses Make with Contracts
Even experienced companies make errors that weaken their agreements. Avoid the following pitfalls:- Using unedited templates — free templates often miss industry-specific or jurisdictional details.
- Failing to review regularly — contracts should evolve with your operations and legal environment.
- Leaving agreements unsigned or unwitnessed.
- Omitting data protection and GDPR compliance clauses.
- Assuming verbal agreements are enough.
How Persona Finance Can Support Your Business
Contracts are the backbone of secure business operations. At Persona Finance, we help clients draft, review, and manage agreements that protect value and minimise risk.Our services include:
- Contract review and health-check: Identifying gaps and risks in your current agreements.
- Custom drafting: Creating tailored contracts for your specific business model.
- Negotiation and compliance support: Aligning legal terms with financial and regulatory needs.
- Ongoing monitoring: Ensuring contracts remain current and effective.
What To Do Next
If your business is growing or entering new markets, now is the right time to review your contracts.Action checklist:
- Identify which essential contracts you already have.
- Highlight outdated or missing agreements.
- Prioritise contracts involving clients, employees, or suppliers.
- Book a consultation with Persona Finance for a professional contract review.
FAQs
What contracts does a business need?Every business should have service agreements, employment or contractor contracts, NDAs, supplier agreements, shareholder agreements, and website terms.
Can I use free templates for my business contracts?
You can, but they rarely address specific industry risks or UK-compliance standards. Tailored contracts are far more reliable.
When should I review my contracts?
At least once per year or whenever your business model, services, or regulatory environment changes.
What happens if a contract is not in writing?
Verbal agreements can be enforceable but are difficult to prove. Written contracts provide certainty and evidence in disputes.
Do small businesses need contracts?
Yes. Contracts are essential for businesses of every size to ensure clarity and protection.
