A legal agreement is a written document that will identify the parties’ roles and responsibilities under the agreement. Once the written document is signed, either manually, digitally, or electronically, the document becomes legally binding. This means that if either party fails to perform his or her duties under the agreement, he is in breach of contract.
Examples of Legal Agreements:
1. Contracts for the purchase of large items, such as appliances that are being delivered from large appliance stores.
2. Wills
3. Healthcare contracts
4. Driver’s licenses
5. License to practice law or medicine
1. There is no specific format that a contract must follow. Generally, it will include some terms, either expressed or implied, that will form the basis of the agreement. These terms may outline contract conditions or contract warranties.
2. Contract conditions are fundamental to the agreement. If the contract conditions are not met it is possible to terminate the contract and seek compensation or damages.
3. Contract warranties are less important terms and not fundamental to the agreement. You cannot terminate a contract if the warranties are not fulfilled, however, you may be able to seek compensation for any losses incurred.
4. When negotiating the contract terms make sure the conditions of the contract are clearly defined and agreed to by all parties.
Contracts may follow a structure that can include, but are not limited to, the following items:
1. Details of the parties to the contract, including any sub-contracting arrangements
2. Duration or period of the contract
3. Definitions of key terms used within the contract
4. A description of the goods and/or services that your business will receive or provide, including key deliverables
5. Payment details and dates, including whether interest will be applied to late payments
6. Key dates and milestones
7. Required insurance and indemnity provisions
8. Guarantee provisions, including director’s guarantees
9. Damages or penalty provisions
10. Renegotiation or renewal options
11. Complaints and dispute resolution process.
Before you sign a contract:
1. Read every word, including the fine print.
2. Ensure that it reflects the terms and conditions that were negotiated.
3. Seek legal advice.
4. Allow plenty of time to consider and understand the contract.
5. Don’t be pressured into signing anything if you are unsure.
6. Never leave blank spaces on a signed contract – cross them out if you have nothing to add so they cannot be altered later.
7. Make sure that you and the other party initial any changes to the contract.
8. Obtain a copy of the signed contract for your records.