Contractual Agreements

The Contractual Agreements Every Texas Business Needs

Your business is only as strong as the agreements it runs on. Contracts define who owns what, who owes what, who’s responsible when something breaks, and what happens when a relationship ends. When they’re missing — or copied from a template that doesn’t fit — the gaps don’t show up until the worst moment: a partner walks, a customer refuses to pay, an employee leaves with your client list.

Compass Legal, PLLC helps North Texas businesses build a complete set of enforceable agreements, matched to their stage and their risks. We serve owners across Dallas, Denton, Collin, and Tarrant counties from our office in Carrollton. If you’re not sure where your gaps are, book a consultation — that’s exactly the question we answer.

What contracts does my business need?

It depends on your stage — and the best way to think about it is as a contract stack that grows with your business:

  • Just starting: company agreement (or bylaws), founder/ownership documentation, and an EIN-and-banking foundation tied to your See our entity formation page for how these fit together.
  • First hires and first clients: employment or independent-contractor agreements, a customer-facing service agreement, and NDAs for anyone who sees sensitive
  • Growing: buy-sell agreement among owners, master service agreements (MSAs) for repeat clients, vendor and supplier agreements, a commercial lease reviewed before
  • Established: non-compete and non-solicit agreements for key people, updated company agreements reflecting current ownership, and purchase agreements when you buy or sell assets or a business.

You don’t need everything on day one. You do need the right pieces before the situations they govern actually arise — because a contract you put in place after the dispute starts is too late.

Employment and contractor agreements

The people who work for you need agreements that match their actual status. Employment agreements set compensation, duties, confidentiality obligations, and termination terms.

Independent-contractor agreements document the relationship correctly — misclassifying workers is one of the most common and expensive mistakes small businesses make, with tax and liability consequences.

For both, the quiet workhorses are the protective clauses: confidentiality, ownership of work product, and — where appropriate — non-solicitation of your clients and staff.

Customer-facing agreements: where your revenue lives

Your service agreement or master service agreement (MSA) is the contract that gets signed most often, so small flaws compound. A well-drafted customer agreement covers:

  • Scope of work — what you will and won’t do, so scope creep has a boundary
  • Payment terms — when you get paid, what happens when you don’t, and who pays collection costs
  • And the terms owners overlook: limitation of liability, warranty disclaimers, termination rights, and dispute resolution (including whether disputes go to mediation first — often a smart, relationship-preserving choice)

If you’re still working from a template you found online, a one-time professional rewrite of your core customer agreement is among the highest-leverage legal investments a service business can make.

Vendor and supplier agreements

On the buy side, you’re usually signing the other side’s paper — leases, software terms, supplier contracts, equipment agreements. These deserve real review before signature, because they’re drafted to protect the vendor, not you. Watch for auto-renewals, one-sided termination rights, and indemnification clauses that shift their risks onto you. Our contract preparation, review, and negotiation service covers exactly this process.

Protective agreements: NDAs, non-competes, and non-solicits

NDAs (non-disclosure agreements) protect confidential information — pricing, client lists, processes, plans — when you share it with employees, contractors, vendors, or potential buyers. They’re simple, inexpensive, and should be routine.

Non-competes are different. In Texas, they’re governed by Tex. Bus. & Com. Code § 15.50, and they’re enforceable only if they’re ancillary to an otherwise enforceable agreement and reasonable in time, geography, and scope of activity. A non-compete that overreaches — unlimited duration, statewide geography for a local role, or a scope broader than the interest it protects — invites a court fight over its terms. The practical lesson: a carefully tailored non-compete protects you; a copied-and-pasted aggressive one may not. Non-solicitation agreements (covering clients and employees) are analyzed under the same framework and are often the more practical tool.

What makes a contract enforceable in Texas?

A valid Texas contract requires an offer, acceptance, mutual assent, and consideration (something of value exchanged by both sides), made by parties with capacity to agree, for a lawful purpose. Most contracts don’t legally have to be in writing — but some do, and all of them should be.

The Texas statute of frauds requires certain agreements to be in writing and signed to be enforceable, including:

  • Contracts for the sale of real estate
  • Agreements that cannot be performed within one year
  • Suretyship — promises to answer for another person’s debt

Even where the law allows an oral deal, unwritten agreements turn into memory contests when relationships sour. Putting it in writing isn’t distrust; it’s clarity — and clarity is what keeps business relationships intact.

Founder and owner agreements: the documents that hold your company together

If your business has more than one owner, two documents matter more than all the rest combined.

Company agreement

The company agreement governs how your LLC actually works: ownership percentages, voting rights, profit distributions, who can bind the company, and how owners exit. Without one, the Texas Business Organizations Code’s default rules apply — and they rarely match what the owners assumed. Most owner disputes we see trace back to a missing or generic company agreement.

Buy-sell agreement

A buy-sell agreement answers the question every co-owned business eventually faces: what happens to an owner’s interest when they die, divorce, become disabled, retire, or simply want out? It sets the triggers, the valuation method, and the payment terms in advance — when everyone is still on good terms. Without one, those questions get answered in a dispute, often alongside a family law matter when divorce puts a business interest in play.

Build your contract stack with Compass Legal

We’ll start with where your business is today: what agreements you have, what’s missing, and which gaps carry real risk. Then we’ll build or fix the documents in priority order, in plain English (or Spanish!), drafted for your business rather than adapted from someone else’s.

Many clients keep their stack current through ongoing general legal counsel support We don’t just draft documents. We help people move forward.

Frequently Asked Questions

Often yes, but with two big problems. First, the Texas statute of frauds requires certain contracts — including real estate sales, agreements that can’t be performed within one year, and promises to pay another’s debt — to be in writing and signed. Second, even enforceable oral agreements are hard to prove when memories conflict. Any agreement that matters to your business should be in writing.

Yes, but only within limits set by Texas Business & Commerce Code § 15.50. A non-compete must be ancillary to an otherwise enforceable agreement and contain reasonable limits on time, geography, and the scope of restricted activity. Overbroad non-competes invite court battles over their terms. We draft non-competes and non-solicits tailored to the legitimate interest being protected, which is what makes them hold up.

A company agreement governs day-to-day ownership and operations of an LLC percentages, voting, distributions, and management authority. A buy-sell agreement governs ownership transitions: what happens to an owner’s interest upon death, disability, divorce, retirement, or voluntary exit, including how it’s valued and paid for. Multi-owner businesses generally need both, and they need to work together.

Yes, if the relationship involves meaningful money or risk. A clear service agreement defines scope, payment terms, liability limits, and how the relationship ends — which protects your revenue and prevents most disputes before they start. For repeat clients, a master service agreement with simple statements of work keeps each new project fast while the protections stay constant.

You can, but templates are written for nobody in particular, often for another state’s law, and they can’t tell you what’s missing for your situation. The expensive problems we see usually aren’t bad clauses — they’re absent ones. A practical middle path: have an attorney build your core agreements once, correctly, and reuse them with confidence.

It’s a written agreement documenting that a worker is an independent contractor rather than an employee — covering scope, payment, control, and ownership of work product.

Classification matters because misclassifying employees as contractors can trigger tax liability, penalties, and wage claims. The agreement should reflect the actual working relationship, and we help you structure both correctly.

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