Introduction to Contract and Form of Contracts
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Introduction to Contract and Form of Contracts

An agreement which is enforceable at law is called a contract. A company has to execute countless commercial and other contracts during the course of its business.

An agreement which is enforceable at law is called a contract. A company has to execute countless commercial and other contracts during the course of its business. But how many company executives possess the simple, easily cultivable, yet rare acumen of concluding their contracts precisely, comprehensively and unambiguously? It is very much desirable and useful to keep in view certain important points in regard to the drafting of contracts, particularly commercial and international trade contracts. A contract between the parties is an instrument whereby the parties freely agree to perform certain acts or refrain from doing sometimes unilaterally or bilaterally. The purpose of the instrument is to bind the parties to the terms and conditions agreed upon. The contract should, therefore, be drafted as deeds between the parties thereto. The old practice of drafting then as Deeds Poll should be discouraged.

FORM OF CONTRACT

Except that they must fulfill all the essential requirements of a valid contract under the law applicable to the contract, for drawing up of the trade, there are no other such prescribed forms. If the law requires any particular category of contracts to be in writing or to be registered, these formalities must be compiled with. A contract may be hand written or printed. It may be as brief or as detailed as the circumstances of a particular trade transaction demand.

However, it is extremely desirable and essential that precise and comprehensive terms and conditions relating to the subject matter and performance of the contract should be incorporated by companies in both domestic and international contracts. In sale-purchase contracts well defined provisions relating to the quality and quantity of the goods, the shipment period, price, delivery , port of the shipment and of destination packing and marketing , mode of payment, insurance, brokerage/commission should also be stipulated. In International contracts additional provisions relating to the applicable law, licenses and permits, taxes, duties and charges, exchange rate, also become relevant and important. Some of the important matters which deserve to be provided for in the contract are discussed briefly here under.

1. Description of Parties to the Contract

2. Legal Nature of the Contract

3. Licenses and Permits

4. Taxes, Duties and Charges

5. Quality, Quantity and Inspection of Goods

6. Packing

7. Shipment of the Goods

8. Insurance

9. Documentation

10. Guarantee

11. Passing of the Property and Passing of the Risks

12. Amount, Mode and Currency of the Payment.

13. Force Majaure

14. Proper Law of Contract

15. Settlement of Disputes Arbitration

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Comments (1)

Nice article with essential tips. Thank you Tania. Want to read more. Please consider me to add as your friend and support. Paulose Varghese

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