The Terms of a Contract are the statements that describe the obligations and rights that are to be mutually agreed upon by all parties involved. Such as what is to be done, how it is to be done and by whom and then explaining what will happen in the event of failure or completion of these terms.
Contract terms are essentially terms and conditions, or T’s and C’s as they are known by most people. These are not just used in business contracts but also contracts between the public and a business when they become a customer – for example every time you buy a product or service. E.g., on your receipt when you go shopping or when you sign a phone contract.
There are some phrases that make up the legally binding terms of any contract that a common across many different types of contracts, we have compiled a short list of some of these below for your reference.
List of common contract terms that are legally binding:
Force majeure This essentially means ‘an act of god’ albeit if both parties have signed a contract but there is a tsunami for example then the terms of the contract can be voided due to an unforeseen circumstance.
A warranty means you can get a refund which could be included in your terms and conditions and thus is part of the contract when you buy a product and the seller has a legal obligation to fulfill the warranty for a time set on the contract.
The length of the contract or furthermore the time of the contract as mentioned above will be the duration and during this time the undertakings are in place and thus until the end unless by mutual consent the parties must carry out their promises.
Tthis means that only one person can sell a product in a certain area or they are the only person to have a certain product. Eg a limited edition car only 20 sold so they pay more but then find out this isn’t the case this would be a breach of contract.
This is the country that the law applies to so for international trade especially outside the EU this is important to keep as your own country or a relevant countries law mutually agreed upon.
Territory is whereby the area of which you can operate sales, for example in an agency counteract where you are selling cars for commission on behalf of a principle(owner). Also if you buy a company you might only own the UK territory via subsidiary company.
Termination is the end of a contract and can be mutually agreed. Usually it is not and one party will be remunerated the offset of projected wealth from the course of business. Also if a serious breach, such as not following the implied law, then the contract can be legally terminated if no single party is a fault with no compensation.
These are the rules to which the course of business can rely upon. For example a company may supply another company with a product on credit but that credit will have a timeframe and if that runs out then they can withhold supply of a product. Furthermore in a private sale, if a person has a product on credit from a store then indeed until it is owned outright then the shop may maintain possession of such an item.
These are responsibilities for each party member.
See also… Breach of Contract