Whether you’re building a new business or maintaining your current one, you’ll come across various types of contracts that your BC-based business may need. 


Having these contracts in place is the first and most important step in protecting your business from a legal standpoint. And how those contracts are worded is equally as important, for establishing expectations and mitigating conflict within your business relationships. Although there is a large variety of business contracts for different purposes, these are some of the most important:


  1. Non-Disclosure Agreement: A legally binding contract between two parties outlining confidential information or material that is not to be shared with a third party. 
  2. Commercial Lease: A legally binding agreement between the landlord (property owner) and the business tenant which outlines the obligations of both parties. 
  3. Employee Contract: A well-constructed outline of duties, expectations, compensation, benefits, and more. 
  4. Contractor Agreement: Defines the official business relationship between client and contractor. 
  5. Supplier Contract: A legal agreement between a business and external supplier to establish the delivery of a set of goods, products or services. 


To read more about the details of these contracts, take a look at our 5 common types of business contracts article

Why is language important in business contracts?

It’s clear that the common contracts we outlined, in addition to any other business contracts you’ll have, are important to your company. That’s why it’s imperative that the language used in your contracts is precise and accurate. 


The words chosen in a contract can have a significant impact on their interpretation. Ensuring that your contracts are carefully reviewed will prevent your business from being at risk. Not doing so could have negative ramifications. 

Here is an example of typical language found in contracts:

Option 1: Company shall pay all invoices of the Consultant within 30 days of the invoice date. 

Option 2: Company may pay all invoices of the Consultant within 30 days of the invoice date. 

What’s the difference?

In option 1, the Company must pay within 30 days. In option 2, the Company has the option of paying within 30 days. 


Using the word “shall” is the key to ensuring that the Company doesn’t get outstanding invoices. Using “shall” implies that the payment is mandatory, whereas “may” conveys that it’s optional. 


Although these sentences differ by one word, that one word could make a significant difference. This also applies to any other word, phrase, number, and sentence in a contract.  

How can you ensure your contract language is accurate?

Although you can thoroughly review your contracts on your own, a small business lawyer who’s knowledgeable in contract law can guarantee your business contracts are accurate.


If you have any further questions, we are here to help. Please don’t hesitate to contact us today!