7 Contracts Every Small Business Needs (Even If You Trust Your Handshake Partners)

Gregory Law Firm • May 2026 • Northwest Arkansas

Even small businesses with the most trustworthy partners need seven core contracts in place: a clear operating agreement (or shareholder agreement), customer service or sales agreements, vendor and supplier agreements, employment or independent contractor agreements, non-disclosure agreements, lease agreements that you have actually read, and a basic terms of service if you do business online. Handshake deals work right up until they do not, and when they fail, they fail expensively.

Why Even Trusted Relationships Need Written Contracts

If you are running a small business in Bentonville, Rogers, Fayetteville, Springdale, or Siloam Springs, you have probably built relationships with people you genuinely trust. Vendors who deliver on time. Customers who pay reliably. Partners who put in their share of effort. Employees who care about the work.

Here is the uncomfortable truth: even the best relationships need clear written terms. Not because trust will fail, but because circumstances change, memories differ over time, and people get sick, divorced, hit by buses, or simply move on. The contracts protect everyone involved, including the relationships you value.

1. Operating Agreement (LLC) or Shareholder Agreement (Corporation)

The most important contract in any multi-owner business is the agreement among the owners. The operating agreement (for LLCs) or shareholder agreement (for corporations) covers how decisions get made when owners disagree, what happens if an owner wants out, dies, becomes disabled, or gets divorced, how profits and losses are allocated, whether new owners can be added and on what terms, and what happens if the business needs more capital and not all owners can or will contribute.

Without this agreement, Arkansas default laws fill in the gaps, and those defaults often produce results none of the owners would have chosen if asked. We have seen multi-million-dollar disputes traced back to the absence of a 10-page operating agreement.

2. Customer Service or Sales Agreements

Every business that sells products or services needs written terms with customers. The level of detail varies by industry:

The cost of one bad customer dispute usually exceeds the cost of having proper agreements drafted in the first place.

3. Vendor and Supplier Agreements

The other side of the customer relationship is your vendor relationships. Critical vendors should have written agreements covering what they will deliver and when, pricing and payment terms, what happens if they fail to deliver, how disputes get resolved, and whether the relationship is exclusive in any sense.

Many businesses operate on purchase orders and informal arrangements that work fine until a critical vendor goes out of business, gets acquired, or fails to deliver during a peak season. Proper agreements provide protection.

4. Employment Agreements or Independent Contractor Agreements

Anyone working in your business should have a written agreement covering the scope of their work, compensation structure (salary, hourly, commission, bonuses), confidentiality obligations, what happens to work product (especially important for creative or technical work), non-compete or non-solicit terms (within Arkansas law limits, which are stricter than some states), and termination provisions.

For independent contractors, the agreement also helps establish the proper classification under IRS and Department of Labor rules. Misclassification is expensive when discovered.

5. Non-Disclosure Agreements (NDAs)

NDAs protect confidential business information when shared with employees, contractors, potential partners, vendors, or anyone else who might learn things about your business.

6. Lease Agreements You Have Actually Read

Commercial leases are dense, often 30 to 60 pages, and contain provisions that significantly affect your business. Common issues include CAM charges that can change unpredictably, personal guarantee requirements that put your home and savings at risk, use restrictions limiting what you can do in the space, renewal options and rent escalation terms, subletting and assignment restrictions, and default and remedy provisions.

Most landlords negotiate. Most tenants do not realize this and sign whatever lease was offered. Having a real estate attorney review and negotiate the lease typically pays for itself many times over the life of the lease.

7. Online Terms of Service and Privacy Policy

If your business has any online presence — website, e-commerce, online services — you need terms of service governing user behavior, dispute resolution, and limitation of liability; a privacy policy disclosing what data you collect and how you use it (legally required in many states and countries); a cookie policy if you use cookies or analytics; and compliance with applicable laws (GDPR for European users, CCPA for California users, COPPA if children might use your service).

Generic templates often miss the specific compliance issues for your business model. Custom drafting matters.

What "Trust" Actually Means in Business

Trust does not mean you do not need contracts. Trust means you can work together effectively even when contracts have to be enforced or interpreted. The contract is for when memories disagree, circumstances change, or someone is no longer in the picture to explain what was meant.

The best partners and customers expect contracts and respect them. Anyone who refuses to put terms in writing is showing you something important about how they will behave when problems arise.

What Each Contract Costs

Get Your Northwest Arkansas Business Protected

If you are missing some of these contracts in your Northwest Arkansas business, we are glad to walk through what you have, what you need, and how to prioritize. Some businesses need everything. Some businesses need just a few specific pieces filled in. We will help you sort it out without selling you contracts you do not actually need.