Whether you’re building a new business or you’re a seasoned business owner moving towards expansion, you’ll come across several types of contracts your BC-based business may need. 


Contracts are a great tool for establishing expectations and mitigating potential conflict with your business relationships. Here are five of the most common contracts you might need.

5 essential contracts to have in place as a small business owner in BC 

1. Non-Disclosure Agreement 

A non-disclosure agreement (NDA) is a legally binding contract between two parties outlining confidential information or material that is not to be shared with a third party. Essentially, if you’re asked to sign an NDA, you’re agreeing to keep the information you have learned through working with that person or business confidential. 


The purpose of an NDA is to prevent confidential business information from becoming public knowledge, or to prevent the person receiving the information from using it for their own benefit. 

2. Commercial Lease

If your business takes place at a physical location, whether it be a shop, office or production space, then you’ll be required to sign a commercial lease for this property. 


A commercial lease is a legally binding agreement between the landlord (property owner) and the business tenant which outlines the obligations of both parties. Sometimes a real estate broker will negotiate these agreements on behalf of the respective clients. 


A commercial lease typically outlines the following terms: 

  • The names of the parties signing the agreement
  • A legal description of the property, including the address
  • The type of property being leased (retail shop, office space or warehouse etc)
  • The square footage of the leased space
  • The length of the tenancy and whether the tenant has an option to renew the lease. If so, how frequently and under what terms.
  • Rental payments
  • Security deposit requirements
  • A description of how tenants can use property (for instance, only for business purposes).
  • Whether the building owner or tenant will make any improvements to the property. If so, on what timeline. Industry professionals refer to this term as the “tenant improvements”. The owner gives this in the form of an allowance if the owner expects the tenant to perform the work. Or it may specify if the landlord should perform the work on behalf of the tenant prior to occupancy.
  • What fixtures, if any, the lease includes (sinks, lighting, shelving systems and furniture etc).

Some of the language and terms used in a commercial lease agreement can be complicated and can become overwhelming to understand. We recommend hiring a small business lawyer in BC to help navigate the terms before signing a lease. Most times, a landlord is willing to agree to some changes in the lease, so having a lawyer check for any red flags or propose some provisions to protect you is a good idea.

3. Employee Contract

FUN FACT: According to the government of Canada, as of 2019, small businesses employed 8.4 million individuals in Canada!


Hiring employees is instrumental to the growth and success of your business! To continue that success, we highly recommend having written contracts in place with every employee you hire. 


A typical employee contact will establish the following:

  • Job description
  • Compensation and benefits
  • Time off, sick days and vacation policy 
  • Employment period (the contract should clearly state if the employment is ongoing or for a set period of time).
  • Hours and schedule (full-time or part-time/days expected to work)
  • Confidentiality terms
  • Termination details 


By having a well-constructed employee contract in place, you are clearly outlining duties, establishing expectations and mitigating the risk of future lawsuits from employees. 


4. Contractor Agreement 

If hiring employees isn’t the right fit for your business, you might hire a freelancer or contractor to perform duties instead.


A contractor agreement defines the business relationship between client and contractor. Your business could land itself in legal and financial hot water if you mislabel an employee as a contractor. So, avoid confusion and ensure you have a contractor agreement in place. 


A contractor agreement summarizes the following: 

  • Project/task details 
  • Deliverable dates
  • Payment and billing terms
  • Confidentiality clause 
  • Contract termination details

Once the agreement is signed by both parties involved, you have a clear understanding of the business relationship and can collaborate with ease knowing you have protected yourself and your business. 


5. Supplier Contract

A supplier contract is a legal agreement between a business and an external supplier to establish the delivery of a set of goods, products or services. 


If you’re using external suppliers as part of your business, we recommend that you have a contract in place with each of them to protect your business from costly delays and disputes. 


Conflicts can arise if a contract doesn’t clearly define the roles and responsibilities of both parties. So ensure that you have one in place and it includes the following: 

  • Define responsibilities
  • Payment schedule and invoicing process
  • Deliverable due dates
  • Termination terms
  • Confidentiality clause

If you have any questions about any of the contracts outlined in this blog, please don’t hesitate to contact us!