1：What is a contract?
A contract is a document which clarifies legal binding agreement
A contract is a document which clarifies an agreement between both parties.
If you have concluded a contract, a legally binding occurs and both parties have to keep to the agreement.
The reason why we have to draw up a contract and the benefit by concluding a contract
The reason why we have to draw up a contract is to enable a concerned person to confirm its content, to prevent a dispute because of forgetting the contents of a contract and to use the contract as evidence when a dispute occurs.
- Both parties can confirm contents of a contract
- By drawing up a contract, both parties can confirm contents of a contract at any time and it prevents from breaking an agreement.
Verbal promise is difficult to recognise the misunderstanding and has no certainty.
- We can prevent a dispute between both parties
- If we have a contract, we can prevent a dispute between both parties.
If the contents of a contract are complicated or are many, it is difficult to correctly understand the contents of a contarct.
Furthermore, people might forget the contents of a contract with the lapse of time. A contract is useful to prevent a dispute due to such a misunderstanding.
- A contract can be evidence at a trial
- When a party sues another one concerning a contract, if there is evidence, namely a contract, a court can judge which party is right.
A contract is a document which can be important evidence when we are involved in a trouble.
Therefore, managing contracts to prevent losing them is important.
The points when drawing up a contract
When you draw up a contract, deciding the details of the contract as clear as possible is important.
Concretely, specify who, why, what, when, where, how and how much, in a contract in detail.
The format of a contract is not specified by law and you can freely draw up it based on an agreement of both parties.
However, a contract is not in effect only by the agreement of both parties.
If a contract is contrary to public order and morality or has illegal contents, it won't be in effect.
You need to check this point.