Question 1

What is an agreement in legal terms?

Accepted Answer

From a legal standpoint, an “agreement” is a mutual understanding between two or more persons. That agreement is not legally binding.

 

A great example of this would be a letter of intent, where both parties want to ensure a proper understanding before they commit to a contract.

 

To make an agreement legally binding, something of value — called consideration — must be exchanged as part of the agreement.  If no consideration is provided, then an agreement is not legally binding.

 

However, it’s important to note that contracts are often called agreements.  In the business world, signing an “agreement” is often considered common parlance for signing a contract.

Question 2

Is every agreement a contract?

Accepted Answer

No, but contracts are often called agreements. An agreement becomes a contract when:

 

 	It offers terms with unconditional acceptance
 
 	Involves parties with the legal capacity to understand the terms and obligations of the agreement
 
 	Exchanges something of value
 
 	It indicates that the agreement is legally binding

 

When those terms are met, the agreement is a contract. From a business perspective, it is generally assumed that both parties intended to enter into a contract.

 

Keep in mind that the item of value (consideration) being exchanged is often reflected by a change in the original position of either party before entering into the contract.

 

While consideration can be something as simple as an exchange of money for goods, consideration might also be intangible.





For example:

 

If your small business promises to deliver 20 hours of work to a subcontractor per week for a set period of time — thereby requiring the subcontractor to commit to 20 hours of exclusive work for your organization each week for the duration of the contract — that guarantee of work would be deemed “consideration” in the eyes of a court.

 

Assuming that your agreement doesn’t include clauses about variable hours, you may be responsible for paying the subcontractor for 20 hours worth of work each week whether or not you have the work to deliver to them.

 

If you’re ever unsure about what may or may not be considered a contract, it’s always best to seek legal advice before entering into any kind of agreement with an outside party.

Question 3

Do my agreements require a signature?

Accepted Answer

While it’s a common misconception, neither contracts nor agreements require a signature in order to become legally binding.

 

In fact, legally binding contracts don’t even need to be written down, as evidenced by handshake deals and oral contracts!

 

However, it’s always best (and safer) to get everything in writing in order to prevent misunderstandings or miscommunication.  Take the time to collect the right contact information, define the terms of an agreement, and create delivery and payment schedules that make sense before signing anything.

 

Creating a high-quality legal document could save both parties thousands in legal fees later on.

 

PandaDoc makes this easy by allowing parties to create contracts, negotiate terms, and sign documents using legally binding electronic signatures all inside the same platform.

 

Whether you can get by with a one-page service agreement or you need a vetted legal document with contingencies at every step, PandaDoc has you covered.

Question 4

Is an agreement binding?

Accepted Answer

Once something of value is exchanged between knowing parties, an agreement becomes binding. This item of value is called consideration, and this practice is true even outside the business world.

 

Real estate operates on housing contracts, room rental agreements, sublease agreements, roommate agreements, and more. When renters sign a lease, often for a 12-month rental, they are entering into a binding agreement by consenting to pay something of value (money) for the right to live in a space for a set period of time.

 

Binding agreements are prevalent in every aspect of societal life. Even child custody and separation agreements are considered a type of contract based on the laws of the state.

Question 5

How do I write an agreement?

Accepted Answer

In order to write an effective agreement, you’ll need to determine if you intend it to be legally binding and what you plan to offer.

 

In the case of real estate, the offer is straightforward. However, for many business operations, that offer may not be as clear. Sales agreements or payment agreements often can’t be written as a boilerplate and require negotiation. This is why proposals and quotes are common before a contract is created.

 

No matter what kind of agreement you want to create, the PandaDoc template library has hundreds of examples to help you get started.  Browse through our library of contract templates and find one that suits your needs.

 

After you finish your draft, we recommend that you consult legal experts to help you finalize more sensitive contracts.

 

Once you’ve created an effective agreement, you can upload it to the PandaDoc editor and use our software to insert custom variables and fields for electronic signatures before sending your documents to your service providers and employees.

Question 6

What kind of templates can I create with PandaDoc?

Accepted Answer

The possibilities are limitless.  Because any document in PandaDoc can become a template, you can create templates from simple invoices to complex services agreements.

 

This can include:

 

 	

 	Confidentiality agreement templates



 

 	

 	Rental agreement templates



 

 	

 	Invoice templates



 

 	

 	Purchase agreement templates



 

 	

 	Standard agency agreement template



 

 	

 	NDA and confidentiality templates



 

 	

 	And more





 

To expedite services further, you can even save modified versions of our documents inside your PandaDoc library as personal contract templates.

 

Creating complex legal agreement templates or consulting agreement templates can save hours of time when onboarding new clients.

Question 7

Can I use your agreement templates in Word?

Accepted Answer

Yes and no.  While you can download our templates in a PDF format and import them into Microsoft Word, they won’t be fully editable as they would be in PandaDoc.

 

Using the PandaDoc document editor, you can write out your contract details, format the document in a way that represents your business, and even use specialized tools to set pricing and collect payment details.

 

By editing our templates in Word, you may find yourself limited in terms of document creation.

Agreement templates