Commercial agreements

Read more about what commercial agreements involve, when they are used and which types are most common.

Glossary
Commercial agreements

Explained – what are commercial agreements?

Commercial agreements are legal arrangements between two or more companies that set out their respective rights and obligations. The term covers a wide range of contracts used in business. The purpose is to create clarity and reduce the risk of disputes. These agreements are common in company law, commercial law and international contexts.

Examples of common commercial agreements include:

In practice, engaging an experienced commercial contract lawyer or a business contract lawyer can help define scope, allocate risk and ensure your commercial agreements are clear, enforceable and aligned with strategy.

When do questions about commercial agreements arise?

Questions about commercial agreements arise when companies collaborate, buy or sell goods or services, or when long-term business relationships are formalised. This includes major investments, joint development projects or where intellectual property needs to be regulated. In cross-border dealings, international instruments may apply, for example the CISG. Clear commercial agreements allow the parties to anticipate and manage risks.

Illustration of commercial agreements, showing contract documents, delivery, confidentiality and a handshake, representing business contracts and trade arrangements.

Points to consider for commercial agreements

When drafting and reviewing commercial agreements, several aspects should be addressed to protect the organisation’s interests.

Ensure the agreement is in writing and clearly drafted.
Define the parties’ roles, rights and obligations.
Regulate payment terms, delivery and allocation of responsibility (for example a payment terms clause and a liability clause).
Include dispute resolution provisions, for example arbitration (a dispute resolution clause or arbitration clause).
Consider competition and confidentiality provisions where appropriate (for example a non-compete clause and a confidentiality clause).
Adapt the agreement to the applicable law (for example an applicable law clause or contract governing law clause).
Assess the consequences of termination or breach of contract (for example a termination clause and a breach of contract clause).

Considering these points increases predictability and reduces the risk of future disputes. A targeted commercial contract review and, where needed, commercial contract negotiation or business contract negotiation will help address gaps and conduct effective contract risk assessment and contract due diligence.

Commercial agreements

Why are commercial agreements important?

Commercial agreements are important because they create a legally binding framework for business relationships. They reduce the risk of misunderstanding and give companies confidence that their rights are protected. They can also support long-term collaboration.

For companies, well-designed commercial agreements are a strategic asset. They ensure predictability and clear terms in transactions, while preserving flexibility to handle shifts in the market or in business strategy.

From a business and trust perspective, commercial agreements are critical. They show professionalism and reliability and a willingness to build stable relationships, strengthening the brand and trust among customers, suppliers and partners.

A commercial agreement is a legally binding arrangement between companies that regulates their business relationship. It is an umbrella term covering various types of contracts.

They are used in many business situations, for example the sale of goods and services, collaborations between companies and the licensing of intellectual property. The aim is to create clarity and reduce risk.

A commercial agreement is drafted by agreeing terms and documenting them in writing. Important components include:

Party details, for example name, address and registration number
The purpose and scope of the agreement
Payment terms
Liability and dispute resolution provisions

Commercial agreements are primarily governed by the Swedish Contracts Act (1915:218), alongside specific legislation depending on content. For international contracts, international conventions may apply, for example the CISG.

Commercial agreements are concluded between companies, whereas consumer contracts govern the relationship between a company and a private individual. Consumer contracts are also subject to specific, stronger statutory protection for consumers.

Legal advice helps ensure the agreement is robust and tailored to the parties’ needs. An adviser can identify risks, negotiate terms and ensure compliance with law, including where the CISG is relevant for international sales. Support from a commercial contract lawyer or a business contract lawyer can be decisive in avoiding future disputes, including on payment terms, dispute resolution and governing law.

Where appropriate, specialist input from a shareholders agreement lawyer or a franchise agreement lawyer may also be valuable for specific contract types.