A business contract is a legally binding agreement between two or more parties. A contractual agreement may be made when the interested parties decide to engage in a transaction, including a purchase or sale, service delivery, property leasing, advertising, joint venture agreements, distribution, or selling of goods, etc. The business contract serves as a collateral to prevent any of the involving parties from cheating.
A business contract comes in different lengths based on the number of clauses entered into by the two parties. It can cover just a single paper or it might spread across several numbers of pages, and in some cases, become a booklet. Every business agreement is bound by legalities and comes with laid down duties. Generally, it’s a good practice to make sure that every business contract is entered into in the presence of lawyers from both sides.
The names and addresses of parties to a business contract are normally found on the first page of the contract. The first page could also house a short description of the jobs of signatories, as well as contain the date on which the contract was signed.
The part following the first page is referred to as the recitals, which features a brief explanation of the type of business the two parties are to agree on and usually covers not more than a paragraph. This part is followed by the specifications, where a detailed explanation of the business is given. This is the exact job portfolio and can span across several pages, with detailed explanations and descriptions.
Following the job portfolio is the payment. Here, there’s a clear statement of how the other party is to be remunerated. The amount can be stated, or in some cases, the determining parameters are stated. The sentence “Time is of the essence” would be added in case the carrying out of the job or contract hinges on time sensitivity. No matter the payment type or factors used, everything should be clearly spelled out in the contract.
All the above-mentioned points are crucial to the contract, however, that’s not all. There are a lot of legal issues to be added. The contract also contains the state jurisdiction that will be used if a dispute and legal suit arises. Additionally, the term of validity of the agreement is stated.
A business contract is a sensitive issue when it comes to business transactions. Before a final draft of the contract is reached, there are several discussions between the contracting parties, as well as their lawyers. In most cases, the contract agreement goes through a lot of deliberations, negotiations, and amendments, until all the parties are satisfied with the outcome before the contract is finally drawn. When all the parties mutually agree on the contents of the contract, then signatures are penned down. So far as the contract is a valid one, it is a general practice to ensure that each and every party to the contract has, in their possession, a copy of the agreement