Businesses of all sizes need contracts and agreements to conduct business operations and activities smoothly. In the past, these contracts were of a few types. But now, we cannot deal for business or personal purposes with only a handshake.
It means the businesses need to sign contracts and agreements regularly. The reason is that the conflicts and issues are on a rise, so the companies feel comfortable signing a contract.
It helps them take the issue to the court in the case of any conflict or any of the parties breaches the clauses of the agreement. In this way, both parties can resolve their issues more effectively.
Although many companies go for verbal agreement even today, as it is legal in many situations until today. Written contracts and agreements are more effective and reliable in the eyes of the courts. Now, the situation has much improved with the help of technology.
In this way, the companies prepare the documents in Contract agreements PDFs to make sure that the contracts are clear in reading and changes are easier to manage. With the help of technology, you can also provide the maximum details in the agreement to address all possibilities and eventualities.
Moreover, electronic signatures make the whole process easier, as there is no need to spend time in signing the documents with a pen.
While talking about the contracts and agreements, we need to learn how a business uses these contracts. We will discuss it in detail.
Every contract is unique in nature and follows specific criteria. Making the language clear for all the parties confirms that it is legally enforceable. When you prepare a legally enforceable contract, you can take it into the court for resolving the disputes, as courts make decisions according to the agreement.
When you will not follow these instructions, the courts can say that the specific contract is not legally enforceable.
However, most contracts need not be taken to the court because verbal communication can be enough to implement the agreement. When you convert it into writing or a PDF contract agreement, its legal importance increases.
If someone violates the terms or something goes wrong, it becomes easier for the parties to use it as a legal weapon. When one of the parties finds that the other party or parties have breached the terms, which is damaging for them, they can file a lawsuit against the party.
The courts and judges determine the breaches or violations, they order accordingly. The courts look also at the reasons due to which someone has negated the breach. However, in this way, the courts only look into the contract dispute only when they confirm that they have a valid contract.
Comparing Contracts with Agreements
You may think that contracts and agreements are equivalent, but under the eyes of the law, both are different. Black’s Law defines both the terms differently. It considers the agreement as a mutual understanding.
The singed parties define rights and responsibilities in the agreement. On the other hand, a contract means the agreement through which the parties define some obligations. Moreover, both parties are legally bound to enforce the agreement.
Essential Points of a Business Contract
To make an enforceable contract, six essential points are required to follow. We will discuss the first three points collectively, as they are interconnected with each other and are related to the contract. The next three points are relevant to the parties that are making the contract.
Offer, Acceptance, and Mutual Consent
To make a contract, legally enforceable, a specific offer should be included in the contract. After that, the agreed parties will accept the specific offers, included in the contract. The last point in this regard is the development of consent.
It means that all the parties have a free will to enter into the contract, and no one is enforcing them to sign the contract. Another important related to the consent is that both the parties have agreed on the same terms that are defined in the contract.
If you have implied all three conditions after getting the intent of the parties, the agreement will become a binding contract. In the case of finding any party, non-serious, no contract is between parties according to law.
There must be something of value exchanged between the parties. The thing of value may be money or services, but both parties must give something (otherwise, it is a gift, not a contract).
The agreed parties must be eligible to sign a contract. It means that both parties should be in the perfect mental condition and must understand what they are going to do. According to the law, miners cannot be a part of any contract; rather only sober and mentally stable parties can sign the agreement.
In the case of finding any mentally deficient party or not competent, the contract will not be valid. If there is such kind of agreement, the non-competent participants can discontinue the contract, as they are bound to do so.
The contract is enforceable legal only when both parties have signed it for a legal purpose. No contract can be signed for an illegal agreement. For example, if you are signing a contract for supplying drugs or prostitutes, the contract will not valid.
An Important Note:
A contract is not illegal if you have not incorporated all the legal requirements, discussed above. It only means that this contract cannot be taken into the court. It means that you are in the contract but without legal purpose.
When it is necessary to make a contract in Writing or Electronic Documents like PDF?
As described earlier, verbal contracts are also legal. The only problem is that you cannot take these contracts in courts. Therefore, the experts suggest that you need to make some of the contracts in writing or electronic documents like PDFs.
Electronic documents become necessary you are engaging in long-term contracts like marriage contracts.
Under this discussion, we also need to discuss implied contracts. These contracts can bind you in those contracts in which you accept unknowingly. Moreover, you are bound to follow all the terms, defined in the contract.
Why Contract Agreement PDFs or other electronic documents are important?
Well, the reason is that a contract plays a major role in all types of business transactions. Not only the contract agreements make the parties binding to follow all the defined terms and conditions, but also help you take these documents as a future reference.
The companies can make the terms and conditions of a contract, a part of their business policies. These contracts help you understand the terms, and if there is any dispute in understanding them, the businesses can use them. Moreover, you can complain in the case of any dispute due to misunderstanding.
For a startup business, these contracts have a vital role, as if everything will be legal, the company can focus on main business operations to get an initial advantage.
Moreover, at the initial level, the legalities and obligations may also be considered to develop a good reputation in the market.
However, the same benefits are also available for existing businesses while using electronic documents as contract agreements. We will discuss all these benefits in detail here:
Proof of details
Every business needs proof of details to make sure that everything is according to the commitment, defined in the contract. Through the contract, the concerned parties agree on mutual requirements that they will observe when they need it.
\Through electronic documents, the concerned parties agree on the tasks and know what they need to perform and what are their rights according to the agreement.
When you design an electronic contract, you make sure that you are legally liable to achieve, which you are expecting, and if there is any loophole, the legal authorities are available to help.
Keep an eye on any kind of misunderstanding
When parties agree on a sensitive joint venture, they enter into an agreement that is in the form of a written contract. It is necessary for both parties to read the contract and develop an understanding of the tasks that they need to complete from their end.
The agreed parties can also include personal expectations in the agreement. In this way, both parties can keep an eye on what has been included in the document.
So, if there is any kind of understanding, the contract helps you identify what is the actual task and take preliminary measures to avoid any further dispute.
Contracts help you enjoy peace of mind with the feelings of security
Peace of mind is a key to success for a businessman. You can achieve it only if you have a written contract with your parties when involved in any business transaction. For example, the employers make an agreement with the employees in which the concerned department discusses all the duties, responsibilities, salary, and rewards.
In this way, both parties know what they need to deliver and what can be the circumstances in the case of any violation. The same happens when you have a joint venture with any other party.
To enter in this kind of venture, good companies sign an agreement where they mention all the duties and responsibilities, assigned to both the parties.
Here, if there is any misunderstanding, the contract helps you keep on track after understanding what a contract is expecting from both the parties.
When the signed parties want to keep the contract, confidential, you can include the clause of confidentiality in it. In this way, both parties agree that no one will disclose the agreement to anyone.
And if one or more of the signed authorities violate this term, the grieved party can go for legal action as per the rules.
Some companies also include non-disclosure provisions if they want to protect their sensitive information.
These provisions also work in the same way, as they are legally binding to follow these special provisions.
You can keep you away from litigation proceedings
In the case of finding any breach from one of the parties, the courts will use the contract as a general reference and identify, who is at fault. In the case of an electronic contract, the chances of resolving the issue improve.
With that, you can avoid expensive litigation proceedings, as you can define all the terms and conditions. It means that the legal authorities will not need to spend a lot of time in resolving the issue.
An official record
You can keep the record of all the transactions, as you have written documents for future considerations. These documents provide you a genuine level of authority, as all types of information regarding the completion date, project requirement, assignment of each party, and the terms on which the contract will be terminated.