If you want to stop losing your money in business or stop being deceived in business deals, please pay attention twice.
So sometime ago, I was manipulated and deceived in a business deal and I lost a whole lot of money because of this and wanted to report to the law enforcement officers, but I was asked a question, was there a Business contract, I just placed my hands on my head and that was it.
A business contract is a legally binding agreement between two or more persons or entities, Now in most situations and countries, a business contract can either be verbal or Oral.
But I prefer Verbal Business contracts, written contracts with terms and conditions expressly written.
There are six basic requirements for creating a valid contract.
- An Offer
- Legal intent
- Competency and Capacity
- Mutual assent/ mutual of obligation/ Meeting of Minds
An Offer is the terms and conditions that brought the parties together, the details, description, price of whatever the product is, it’s like the “subject matter” the meat of the contract.
The parties must be willing to live and abide by the terms and conditions, and the acceptance must be expressed (written) as an agreement.
An exchange of some Sort of value must take place, could be money for a product, tit for tat, do this for me and I’ll do that for you.
The contract terms and conditions must be legal, the purpose of the contract shouldn’t violate the law, so stealing, killing and other vices are discouraged
The parties involved in the contract must be legal by age, must not be under the age of 18, mentally disabled or intoxicated within the time of agreement.
All parties must give mutual consent else the contract is void.
Contracts are meant to be reviewed periodically and do not need to be written by a Legal practitioner but would be better if reviewed by one and for testimonial purposes, every contract should have a witness at least.
The Contract should cover all possible outcomes including failures and breaches (when one party fails to live up to its obligations under the contract)
The Contract should have an agreed way to resolve disputes if any should arise, and a jurisdiction to resolve the matter, like a particular State or Country and agreed Court or Arbitration.
3 penalties of a Breach of Contract…
A. Specific performance: here the contract is performed regardless of shortcomings or flaws.
B. Damages: a fine is paid that would cover the losses made by the negligence of the offender. Eg because a party didn’t pay for a product, and it expires because of the negligence of the buyer, and the buyer doesn’t want to buy again, damages can be paid for expired product.
C. Discharge of duties: all parties are relieved of benefits, duties and obligations in other words all parties go back to how they were..
Hope you found this Valuable? Always have a contract before business