A commercial contract is a legally binding agreement between two or more parties which obligates them to do or not do certain things. Whether by a formal written agreement or through an informal understanding, most businesses use commercial contracts to ensure that the terms of their business deals are clearly described and understood.
In general, a contract is a legally binding agreement. It serves not only to bind the parties but also provides recourse if one party does not hold up its end of the bargain and the other party has resulting damages.
Basic requirements for an enforceable contact (whether written or oral) include:
Consideration. Each party must promise or provide something of value to the other. Without this exchange, there is no contract.
Offer and acceptance. A clear or definite offer to contract must occur (“Do you want to buy this?”) and an unqualified acceptance (“Yes!”).
Legal purpose. The agreement must be for a purpose that does not violate the law. For example, in many states, certain contracts requiring payment of high interest rates may violate usury laws.
Capable parties. To be “capable” of making a contract, the parties must understand what they are doing. The general presumption is that minors and people with certain mental disabilities are not competent to enter contracts, for that reason, contracts executed by them are generally not enforceable.
Mutual assent. This must be a “meeting of the minds.” The parties must intend to be bound and agree on the essential terms.
Commercial agreements can be verbal, in writing, or even implied in a formal or informal matter. They can cover all aspects of business, including wages, leases, loans, hiring, and employee safety. To breach a commercial agreement, one of the contracting parties fails to live up to their part of the agreement.
Commercial agreements utilize plain language, but they also include warranties and boilerplate language that has typically been reviewed by a lawyer beforehand. They are often standard forms that can be used on an ongoing basis with other providers or suppliers.
It is expected that businesses know how to protect their own interests, and an integral part of that is understanding what constitutes a legally valid and enforceable commercial agreement. Because these types of agreements are between business parties only, they use plain language rather than legal jargon when preparing the agreement.
Easydrafting.in role in providing commercial agreement/contracts
|2 days after we receive the details for preparing the commercial agreement
|VALUE OF THE STAMP PAPER
|Rs. 100 (Will be provided by us)
|Required (Will be provided by us)
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