A business contract is an agreement that is legally enforceable. The creation of a business contract requires the acceptance of an offer, promise to perform, performance time requirements, terms and conditions of performance, and performance of the agreed upon tasks. The law provides remedies if a breach of contract has been determined. Remedies include restoring the wronged persons to their position had the contract not been breached, and punishing the breaching party.
To establish a business contract, an offer between two competent parties must be created and agreed upon. This offer can be a service or product provided by one party and paid for by the other, or a service or product provided and traded for the other party's service or product.
Promise to Perform
Each party must promise to uphold its specific legal and valuable parts of the contract. The contract specifies what each party will be providing. A formal document outlining the offer or offers is legally binding, and it protects both parties regarding all details written into the contract.
Time requirements regarding the delivery of the product or service are outlined. This section includes exact dates and times, and what will be delivered, by both parties, on each date. All information regarding requests for more time and/or early delivery will also be outlined.
Terms and Conditions of Performance
How the product or service will be rendered will be detailed in the business contract. This includes availability of services or products, specific requests, etc. Performance terms and conditions will be negotiated by both parties and agreed upon.
The actual rendering of the promised goods or services is necessary for the creation of a business contract. If both parties fail to provide the duties outlined in the contract, the legality of the document is compromised. For example, if the product was provided but not rendered because of lack of payment, and all product requirements were met, the contract becomes moot.
For a written contract to be legally binding, both parties must sign the document. The aid of a lawyer and signing by a notary public can be used but are not necessary for the document to be valid in the eyes of the law.