ACROBAT FOR BUSINESS | 9-MINUTE READ
11 types of contracts you need to know.
Learning about different contracts keeps business running efficiently.
Business contracts sometimes feel like additional red tape holding you back from the more enjoyable parts of your job. Still, contracts are more than paperwork — they build trust and clarity between you and your customers. Plus, contracts cover your business in case of a disagreement or issue.
Closing deals, managing vendors, hiring employees, and starting a new business venture all require solid contracts. The challenge is that each situation is unique, requiring different types of contracts tailored to how you do business.
Fortunately, you don’t need to be a lawyer to make the most of business contracts. In this guide, you’ll learn about the most common types of contracts in business. You’ll also see real-world examples of each contract type, learn how tools like Adobe Acrobat for business can streamline the entire process, and understand how to write a contract.
1. Non-disclosure agreement (NDA).
An NDA is a type of contract where two parties agree to keep information confidential. It outlines what information you consider confidential, how each party can use it, and the consequences if either party violates this legally binding agreement.
NDAs are usually executed when sharing proprietary information with outside parties, like vendors or potential business partners. They secure your intellectual property and trade secrets from improper use, even if the deal falls through.
However, to be considered legally binding, you and the other party must sign the NDA before disclosing any information. Acrobat for business helps you upload or create NDA templates and send them off for a signature in just a few clicks. If you need to sign an NDA created by another business, the Acrobat generative AI tool simplifies legal jargon to help you understand what the NDA actually says before signing anything.
2. Memorandum of understanding (MOU).
A memorandum of understanding is a helpful type of contract that outlines what you and a potential business partner can expect while working together. MOUs are typically informal and treated as prototype contracts that document your goals and expectations.
MOUs are especially useful in the early stages of partnerships, joint ventures, or collaborations where both parties want to clarify intentions before committing. They’re common in cross-sector collaborations, pilot programs, and multi-organization initiatives. For example, a startup and a university research lab might sign an MOU to outline their general plans for creating a product together before making a formal licensing agreement.
3. Fixed-price contract.
With a fixed-price contract, the business offering a service agrees to do work for a set price. Unlike other contract types, like time and materials, the cost of a fixed-price contract won’t change unless the client asks for a change in scope.
This contract type is commonly used in project-based work such as software development, construction, design, or consulting, especially when the deliverables and deadlines are well-defined upfront. For example, a design agency might enter into a fixed-price contract with a client to deliver a rebranding package — including logo, website, and marketing assets — for $20,000 with clearly defined milestones and deadlines.
Fixed-price contracts are popular in many industries, although you still need to learn how to write a contract that covers all the essentials, regardless of the pricing model. Acrobat for business simplifies creating different types of contracts thanks to its customizable templates, helping you save time while personalizing contracts for every deal. Generative AI can also review your clauses to clean up the contract language and resolve typos.
4. Sales agreement.
A sales agreement is a binding contract that describes the terms of a purchase, including:
- A description of the product or service
- Pricing
- Delivery terms
- Warranties
- Payment requirements
- Expectations before money or goods change hands
As a B2B company, you’ll need a sales contract to clarify product transactions, make wholesale orders, license software, and sell or buy enterprise services. For example, a wholesaler and a retailer may enter into a sales agreement covering a quarterly supply of merchandise, including volume discounts and delivery schedules.
However, sales agreements are just one type of contract you’ll see in B2B. Learn more about the different types of legal documents and forms every business should be familiar with. The good news is that Acrobat for business allows you to store all contract types in your cloud-based library, streamlining everything from template management to contract storage.
5. Time and materials contract.
Time and materials (T&M) contracts charge clients for the actual time spent and materials used for a project. While fixed-price projects charge a flat rate, T&M contracts charge clients after the fact based on usage. This type of contract is ideal for projects where the full scope isn’t clearly defined at the outset, like ongoing IT support or marketing campaigns. With this contract type, a startup hiring a developer for a new app feature might use a T&M contract since the design and feature list could change.
More popular contracts
The following are additional types of contracts that you may want to explore.
6. Retainer contract.
You may need a retainer contract if you regularly deliver the same goods or services to a client. With this contract type, a client pays a recurring fee (usually monthly) in exchange for services over that period. Retainers are great for providers because they guarantee income. They also give customers the benefit of guaranteed availability and predictable pricing.
Most B2B professional services use retainer contracts. Legal, marketing, IT, and consulting businesses charge ongoing retainers to offer consistent, reliable customer support. For instance, a company might retain a digital marketing agency for $5,000 per month to handle content, ads, and social media strategy.
7. Simple contract.
Not all B2B agreements have to be complex. Simple contracts are short and straightforward, outlining the basics of a deal between two parties. In some cases, simple contracts are verbal, although written contracts are always safer. The upside is that simple contracts avoid jargon and are generally less formal, which can improve understanding.
Simple contracts aren’t right for all situations, but they’re a fit for low-risk transactions, short-term partnerships, or an agreement with a partner you already know and trust. For example, a business hiring a freelance photographer for a one-day shoot might use a simple contract that covers the date, rate, deliverables, and usage rights.
8. Bilateral contract.
A bilateral contract is one of the most common types of contracts for B2B companies. This contract is a mutual exchange of promises between parties, with each agreeing to uphold their end of the bargain. Bilateral contracts are used in everything from service agreements and sales contracts to employment deals and partnership agreements.
Simply put, if both parties commit to something, they’ve made a bilateral contract. For example, a consulting firm promises to provide services, and the client promises to pay $3,000 a month. Both sides have responsibilities, and the contract protects everyone involved.
Still, understand the common types of contract clauses in bilateral contracts, especially if the other party wrote the contract. Always review contract terms to ensure you can actually deliver what’s in the bilateral agreement.
9. Unilateral contract.
A unilateral contract is the opposite of a bilateral agreement. With this contract type, just one party makes a legally enforceable promise. These contracts are often used in reward offers, open service proposals, or incentive-based programs. They’re common in industries like marketing, recruiting, or promotions, where one party sets terms that another can choose to act on.
For example, if you earn a $1,000 referral bonus from your company for bringing in a new employee, the company is legally bound to pay you because of the unilateral contract. You aren’t required to refer candidates, but because you followed the company’s contract, they must pay.
10. Cost-plus contract.
Also known as cost-reimbursement contracts, cost-plus contracts require the client to pay for all expenses plus the fee for the provider’s expertise. The additional charge is usually either a fixed fee or a percentage of the project’s total cost.
Cost-plus contracts are ideal when estimating the total cost of a project is difficult. Government contracts, research and development, and large-scale projects with a lot of variables often use cost-plus contracts. However, they require thorough tracking and transparency to ensure the client understands exactly what they’re paying for. Rely on Acrobat for business to keep tabs on projects as you go, creating itemized contracts with expense categories, reporting requirements, and approval workflows. Acrobat also supports storing receipts and invoices in the cloud, easily helping you produce documentation if the client has questions.
11. Unit price contract.
This contract type breaks a project into individual units (like hours, materials, or tasks) and assigns a fixed price to each. Unit pricing is a very common type of construction contract because knowing the total scope upfront is a challenge. So, let’s say a contractor charges $100 per linear foot of fencing. If the project requires 300 feet, the client pays $30,000. If they need more or less, the cost adjusts accordingly.
These are just some of the many types of contracts B2B providers use to ensure clarity during business deals. Whether for a one-time partnership or an ongoing agreement, understanding the different types of contracts will help you pick the right option that protects your interests.
You don’t need to reinvent the wheel whenever you need a contract. Adobe for business offers valuable features that simplify and streamline contracts, including e-signatures, version tracking, secure storage, and generative AI. Rely on Acrobat to get everything you need to create, understand, and manage contracts with confidence. Try Acrobat for business today to simplify your contract workflow.
Frequently asked questions.
What’s the difference between a contract and an agreement?
Do contracts need to be notarized to be valid?
Can I use the same contract template for every client or vendor?
How long should I keep business contracts on file?
What happens if I leave a key element, like pricing or deadlines, out of a contract by mistake?
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