History of Contract
Dating back to imperial times, the system of contract and agreements were initially adopted by kings and queens who formulated deals with other rulers or emperors in order to establish a solid pact regarding authorities, boundaries, war settlements, etc. Later the rulers used the contract technique to pass on certain rights to royal family members and few upper class citizens for administration, trading and revenue collection.
In the middle age during industrialization, industries gained knowledge and came to know about importance of contracts and started using it initially for labour contracts and later for almost all key activities to deal with external world. Not only that companies entered into contacts with rulers to establish and expand its businesses – A best example is the contracts by East Indian Company with Indian rulers that paved way for their entry into India with intentions to later conquer it – That is the power of contract.
In the recent past, the growth of contact culture took a Para dynamic shift and reached to common man level for usage towards their various needs, can you believe that there are contracts entered for even marriage in certain countries.
What a pace of growth contract gained in terms of importance and usage. Countries also started amending its local laws empowering contractual rights day by day.
Global scenario of Contract
Business organizations functioning in the United States and other developed countries solely depend on the system of contracts in need to avoid disruption. Additionally, format of contracts have been standardized there (format differs between state to stats) on various cases and made easy to follow by all. With the case of employment, under U.S. employment law, it is said –“Most companies avoid entering into any sort of contract with most employees. Without a contract, the law defines the employment relationship as ’employment at free will’.” – Shows the important of contract there.
In India, the importance of contract culture lies at the bottom level in a premature stage. Most businesses and personal agreements today still practise traditional form of exchange without a proper contract. It is not until recent influence from industries, that business and tenants have started to lay contracts and understand the power of it. The scope of establishing a contract system is a must factor for all businesses aiming to grow and sustain deals like developed countries.
Why you require a contract?
We understand that contracts might seem boring like Greek & Latin to you. But here are the core reasons why you need to establish a systematic contract base.
– With a contract, one can communicate his/ her understanding of the deal in written format that can be easily grasped and interpreted with consent.
– Negotiations and deals are crafted skilfully based on a requirement cannot be remembered at all times without a well stated contract.
– In the case of dispute, contracts help resolves conflicts and risks.
Essential Written Contract
Having a written contract makes it easier for agreed partakers as they are aware of what is expected to be done, the need and when, which makes it simpler to resolve any disputes that might arise.
The written contract culture is much observed at organizations and industries as they can manage key functions with them only every day. But it is also a major requirement for today’s independent businesses and solo practitioners to adopt the system of written contracts. Where a business deals with product or service, it is a needy one. It’s always better to have your contract in writing, no matter how small the job is. This is advisable even if it means delaying to start the work. A written contract is essential to cover following factors:
• Technical specifications
• Quality requirements
• Financial agreement policy
• Contract period duration
• Insurance coverage
• Legal obligations
It is simple to understand most of the contracts need to cover, technical aspects, financial obligations and of course most important legal aspects. We at BizChanakya, a business advisory group extend our services to prepare best speculated contracts for your business that can only be achieved by a team of technical, financial and legal professionals and a combination of skill that cannot be achieved by a single skill, in general.
A carefully drafted perfect contract only can protect the business in order to have a winning edge, not all the contracts can achieve it.
Leave the complexity of business contract drafting or reviewing a business contract to BizChanakya skill pool and Relax!