Why Agreement Is Important
A contract is a written agreement between two parties that explains the terms of a transaction. In a company, the work that is performed is usually listed, as well as important information such as due dates and costs. Written agreements can also protect personal relationships. If you go to business with a friend or family member, you risk compromising your relationship. You can minimize this risk by recovering the details of your partnership in writing and including an exit clause that establishes the end-of-partnership protocol. A clean break is less likely to cause injured emotions. It is important that your agreements are concluded in writing to protect your interests and enforce your rights. In addition, both parties will have a clear understanding of what is expected of them and what is even more important, what has been agreed and what is not. It will also set out the consequences, procedure and possible recourse if a party does not fulfil one of its agreed obligations or if you wish to terminate the contract for any reason. A clear and well-written contract (regardless of the length of your contract) clearly shows what is expected of someone or a company and what their position is.
Knowing exactly where you are is important, it allows for better working relationships and if things go wrong, you have some paper (or electronic document) that clearly shows what should have happened from the beginning. For reasons of clarity, a “contract” is a formal process and can be written or oral. The term “agreements” is also used and, although it is generally interchangeable, large-scale agreements are often less formal, but may become formal if the elements of a contract are in place. So you could “agree” to help a friend cut down a tree, but it is not a “binding contract” unless there are many other elements of that agreement that both parties approve of and that are related or must be negotiated in a way that has shown that it intends to be tied to it. If this subject was taught at the Law School, it was called “contract law,” not “contract law,” so let`s go on by giving the subject its real name.