What is a contract?
The concept of “contract” enters into our life not only from the beginning of business, but also in other situations when it is necessary to fix in writing any verbal agreements. We reflect on what is a contract at the moment when we take up papers with such a name, when any conditions are not fulfilled. When all is well, we don’t even bother to read the lines of this document, but in vain.
What is a contract
This is an agreement of two or more parties, which defines the rights, obligations and concepts. The word “contract” refers to paper, a document that details all the terms of such an agreement. A contract may be concluded between individuals, between an individual and a legal entity, between legal entities and the state. A contract is the most common form of establishing relationships between persons entering into compensatory or non-reimbursable relationships, most often they are monetary, which suggests that the contract is a transaction.
The agreement reflects the characteristics of these relations, coordinates the individual interests of each of the parties, and establishes legal guarantees for each of the parties to the agreement.
Components of the Agreement
You can make an agreement yourself, but only if you have sufficient experience in concluding such documents. Each contract has a number, date of conclusion and date of entry into force. The heading registers who concludes this contract, who is Party 1, and who Party 2, the names of the companies, the type of ownership are written, on the basis of which the heads of the companies signing the contract act.
The following describes in detail what is the subject of the contract. Pay special attention to this item. It is necessary to decipher in detail what and how will happen in your transaction. The clarity of this clause will determine the outcome of the relationship under this contract.
In the continuation of the documents the following points are written out: “Rights and obligations of the Customer”, “Rights and obligations of the Contractor”. Carefully read these points, write down the procedure for action during the transaction, the penalty in case of violation of the terms of the contract, the procedure for correcting deficiencies, price changes in this regard, and much more.If you doubt the completeness of the conditions, then hire a lawyer to draw up this important document.
The essential terms of the contract are the provisions on the transaction price and the procedure for payment. The price is indicated both per item and for the entire transaction. Describe the schedule of repayment of payments under the transaction - prepayment, principal payment, penalty in case of delay, what may be delay, for how many banking days should the first, last payment be received. Check this item with your accountant.
At the end of the contract is determined by the judicial authority, which the parties apply in case of failure to reach agreement on controversial issues. Force majeure circumstances are also prescribed, for which a different responsibility arises than under the contract, the types of these conditions, their terms of validity.
At the end, all the details of the parties, the signatures of the first persons are indicated.
Based on this, it can be argued that a paid agreement is a transaction that occurs under certain conditions.
Types of contracts
Contracts are paid and gratuitous. Charges involve payment for services rendered or goods delivered.Gratuitous agreements involve donation, free storage, use of property, as well as acts of charity and patronage.
Most often, under contracts, the transfer on a reimbursable basis from one person to another of any material values. This document includes, in addition to the subject of the contract, a detailed schedule of receipt of funds, which is a contract of sale.
- on the provision of services;
- employment contracts;
- agency fees;
- rentals and more.
Also, there are preliminary and final contracts. The preliminary contract deals with transactions that will be concluded in the future under certain conditions. Responsibility for the waiver of a future transaction is also determined. The preliminary contract always leads to the main final contract. The final contracts determine the transaction process itself. It is he who gives the parties rights and obligations, it describes all the conditions of the contract. There is another term in the contract business - the offer. This is the direction of the second party a written proposal for the conclusion of the contract.
Changes to the terms of the contract
If the contract is valid for a long time, then the inevitable occurrence of changes in its conditions, which are often made by life itself. These changes are made to the contract in the form of Supplementary Agreements. An integral part of the contract is each Supplementary Agreement, no matter how many they are.
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