What is a Contract?

What is a Contract?

Written By
Joy Cunanan
Updated on
April 6, 2022
Reading time:
0
minutes

Contracts Defined

What is a Contract?

Contracts are regarded as a necessary component of operating a business by both large corporations and small firms. Every time something is exchanged for money, whether it be goods, labor, or services, a business contract should be created to safeguard all parties.

Contracts are agreements that give rise to legal obligations enforceable by law and have a binding effect between parties. A contract may be constituted in the following forms: verbal, written, or a combination of both. However, a written form is preferred in the case of commercial, real estate, and financing agreements.  

It is imperative that both parties understand the laws governing their contract to guarantee their mutual protection under the law in the event that one or both parties fail to perform their obligations. 

Business contracts are agreements that are enforceable by law between people or organizations. To correctly identify the legal obligations that must be fulfilled, it is crucial to fully comprehend the terms and conditions stated in a contract. By doing this, you are making sure that you and your company are covered in the event that the other party is unable to uphold their end of the bargain.

Author
Joy Cunanan
Joy is the Digital Transformation Manager at Lexagle. As a marketing professional in the Tech and B2B industry for over seven years, she is always on the lookout for the next best solution in the ever-changing online world. With a passion for helping businesses thrive and optimize operations, she shares her expertise in the power of contract lifecycle management and its capacity of easing the contracting process for busy organizations worldwide.

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