Posted on Leave a comment

What is a Contract?

In short a contract is an agreement for the exchange of goods or services for the same or for money. This agreement must be fair. That is, an agreement cannot be so one-sided that one party is taking advantage of the other.

There must be a start date or time of the contract and an end date or time. So the shortest contract is when you buy something in a shop. You see the product, it is marked with a price, you like that price and take hold of the item. That is the start of the contract. you then go to the counter and pay for the contract, this is the end of the contract. A long contract is like that of a building contract, 30 year loan or a 99-year lease. Long-time contracts must hold the original agreement. If there is an alteration to the contract in any way, there must first be an agreement that in the first contract that the contract can come into the review, with timely notice. This is why if there is an increase in the price of materials or labor, this alters the agreed amount and there must be a review so that the contract remains fair.

Thus to take my web page as an example. I offer to you the goods on display. Be for you purchase the item you must first satisfy your self that the item is what you want. secondly, I have a price on display, this is the offer; “I have this you can have it for $ that”. You can make a counteroffer, “I like what you have, but I only want to pay this for it”. I then have 3 options, 1- I can accept your counteroffer, 2- reject your counteroffer, or 3 – “That is too low, would you buy ti for this?”. Then the purchaser can accept or reject the counteroffer. the contract is entered by one of the parties agreeing to the price. Then the contract is in action when the product is paid for, and then completed when the purchaser receives the product.

So far we can see that a contract can be entered in several ways.

  • Verbal – “I’ll take that item for this price”.
    • Buying from a person that is in front of you.
  • Written – “I’ll sign that, I like the agreement”.
    • Buying an item from a web page.
    • Contracting someone to build a house.
    • Getting into debt with a lending organization.
  • Indication – You hold up your hand to hail a taxi.
    • Bidding at an Auction
    • Hailing a Taxi.

This has some assumptions that are implied. That is, has the person poses the legal right to sell the item or make that agreement?

This question is not asked from a seller when selling on Facebook or eBay. This question is not even asked of me when selling on this my web page. I can assure you that those items that are not my property are stated as such in the Consignment category. However, I do have a license (permission) from the owner of the item to sell that item for them.

Thus when you go to the supermarket to buy your food. The person at the checkout that you buy the food from, does not own the products on the shelf. But by being employed by the supermarket they have a licence to act on behalf of the organization to make a deal with you. This is the same when you go to the bank to ask for a loan.

Then you get a receipt. the receipt is not the written contract, it is proof of the completed contract. This proof is really only used for 3 main reasons. 1 – Proof that you now own the item. 2 – For your own paperwork that you have a record of where you spent your money. 3 – lastly, for proof to the tax office that you have spent money and wish to claim a tax reduction for that purchase.

Please do not take this as a true legal interpretation. This information I have learned from tertiary education I have completed and my experience. over the years. 

Leave a Reply

Your email address will not be published. Required fields are marked *