What is the most common type of legal contract?

Sales and service contracts (like Purchase Agreements, MSAs, and SOWs) are the most widely used across industries, but NDAs often lead in volume due to high-frequency collaboration.

What type of contract should I use for hiring someone?

Use an Employment Agreement for full-time roles and an Independent Contractor Agreement or Consulting Contract for project-based or freelance work.

What is the difference between a service contract and a sales contract?

A sales contract governs the transfer of physical goods. A service contract covers intangible work or expertise — like marketing, IT support, or consulting.

Which contract type offers the most protection to the buyer?

Fixed-price contracts provide cost certainty, while indemnity clauses or SLAs in service contracts offer performance protection.

Can NDAs and non-competes be enforced globally?

NDAs are widely enforceable with proper drafting. Non-competes vary heavily by region (e.g., limited in California, regulated in the EU).

What type of contract is best when scope is unclear?

Time-and-Materials or Cost-Plus contracts are preferred when flexibility is needed. Fixed-price contracts work best when deliverables are well-defined.

Can I modify contract types inside a CLM system?

Yes — modern CLM tools like Sirion allow contract metadata (e.g., type, value, renewal category) to be updated dynamically for governance and tracking.

Your Ultimate Contract Management Resources

Contract Management

What You Need to Know About Liquidated Damages in Contracts

Learn what liquidated damages in a contract are, see real examples, understand legal rules, drafting best practices, and CLM management tips for enterprises.