Every business has to engage in some form of agreement with another entity. This agreement is usually accompanied by a contract, legally binding both parties. Contracts are complex documents which require careful understanding. No business, big or small is exempt from the responsibility of drawing up or signing contracts. Some examples of commitments companies enter into which include a written contract are:
- Purchase agreements for services and goods
- Agreement for lending or borrowing money
- Rental contracts for physical assets
- A partnership with another party or a joint venture
- When the company is the supplier or a contractor for specific services
Being able to manage contracts carefully plays a vital role in the success of these business relationships.
What is the different between a verbal and written contract?
A verbal agreement between two parties is another form of a legally binding contract. However, in most transactions, especially those involving the buying or selling of goods, assets, and properties, a written contract is essential.
It is not common for commitments between businesses to involve verbal contracts. Although it is based on trust and good faith, it is still best that you have written proof of what was agreed upon in case problems arise later on. Many businesses today hire contract writing services like Devant Contract Support to ensure a professional approach to handling agreements.
Elements of a contract
A legally binding contract needs to have the following essential parts:
- The offer.
- The acceptance.
- Section for the intent to enter into a legal relationship.
- The terms or consideration involved such as payment required.
There are some instances when a contract may be deemed invalid. Some examples of these situations include:
- A contract that involves parties in committing illegal acts or crime.
- When the party entering into an agreement is not capable of doing so, such as a minor.
- When the person who agreed to the contract was misled or coerced through improper conduct or influence.
In understanding the legality of a contract, always make sure that you have a solicitor to help you. Having a solicitor present before signing a contract minimises the chance of not being able to scrutinise every detail of the terms and conditions.
Reminders before signing a contract
In relation to having a solicitor present before signing a contract, here are a few other reminders:
- First, you need to read every word in the contract and don’t forget to include the fine print. Sometimes, there may be details in the fine print which you are not in agreement with, so it is best to contest it before signing the document.
- Keep a record of the agreed upon terms and conditions and make sure that none were changed or left out in the written form.
- Don’t rush signing a contract. Take some time to think about it before making a final decision.
- Never leave any section blank. As much as possible, fill them in or cross out the empty spaces to prevent anyone from adding or altering anything in the document later on.
Lastly, always ask for a written copy of the contract to keep for your records. You also need to know the extent of your obligation, so always have a solicitor present to explain this to you in detail.