A commercial transaction is a transaction between two parties where the parties trade commodities or services for compensation. In short, commercial transactions simply are business transactions. Many different types of commercial transactions exist, covering from one-time deals, like sales, to long-term agreements between buying and selling investments in a company. In order to successfully navigate these often complex transactions, one must understand the difference between commercial and investment property. Understanding these differences will help facilitate the successful conclusion of any commercial transaction.

Understanding the difference between commercial transactions and commercial properties allows one to properly document the transactions involved in the transaction. This allows one to document the items purchased or sold and to easily identify the parties involved in the transaction as well as the legal rules governing each transaction. Here are three types of commercial transactions:

Property and Real Estate: These are some of the most complex legal transactions in existence. These involve both real property and fixtures. Understanding the difference between these types of commercial real estate transactions helps one to better organize their business affairs. The difference between a commercial lease and a commercial purchase can be one of many thousands of dollars. Understanding the distinction between these types of commercial real estate transactions will allow any business the opportunity to better utilize their assets to best advantage.

Law and Legal Rules: Many types of commercial transactions fall under the category of “commerce” and become subject to legal rules. These include importation of goods from foreign countries, transportation, sale, lending, leases, improvements, inventions, etc. Understanding the legal framework that governs these types of commercial transactions can greatly assist any business in effectively organizing their affairs. Knowing the legal consequences associated with each type of transaction can allow any business to prevent costly mistakes and to stay out of court.

International Transactions: When international transactions take place there are many factors that come into play. The ultimate goal of any international transaction is to move goods from one jurisdiction to another jurisdiction without breaking any laws or violating any regulations in the process. Each jurisdiction has different regulations and rules that they enforce to govern international transactions. It is important to understand the legal framework of the country where one wants to sell goods or acquire goods to stay out of trouble. In some cases the ultimate decision on the validity of an international transaction can rest on the interpretation of contract law, but there are many other considerations such as jurisdiction, licensing requirements, taxation, and sales laws.

Commercial Law: Contracts, investments, acquisitions, mergers, liens, osures, and all other commercial dealings fall under the realm of commercial law. One of the more challenging aspects of commercial law is that it often involves complex international agreements. This is another reason why many business people to hire an attorney to help them successfully navigate through commercial law. Any time two or more parties enter into a commercial transaction, it becomes necessary for an attorney to be involved in the transaction to explain the agreement and its implications for each party. Having an attorney on your side will ensure that the transaction complies with all applicable laws and regulations.

Closing Procedure: An agreement or transaction cannot be legally closed unless both parties have entered into a contract. Because commercial transactions are complex, it may be necessary to have an attorney close the deal for you. If the transaction is going to involve a transfer of property, one party may need the services of a lawyer to ensure that the property is transferred properly and that there are no issues surrounding lien or mortgage on the property that will affect the closing of the transaction. In addition, if a bank or other lending institution is involved in the transaction, the lender will also likely want an attorney because the bank is considered a third party in the transaction and an expert in commercial law.

Understanding Commercial Documents: Understanding the types of commercial documents is necessary before entering into any type of agreement. While most types of business transactions involve a seller and a buyer, not every transaction is so straight forward. If a seller and a buyer are involved in a dispute over property or a contract, one party may have a legal claim while the other may rely on fair market value or other arguments. As these situations tend to be complicated, an attorney is often a better choice to protect one of the parties in a commercial documents dispute. Having an attorney involved can help a party preserve evidence that will help in their case.