contract

(redirected from contractual)
Also found in: Dictionary, Thesaurus, Medical, Legal, Encyclopedia, Wikipedia.

Contract

A term of reference describing a unit of trading for a financial or commodity future. Also, the actual bilateral agreement between the buyer and seller of a transaction as defined by an exchange.

Contract

1. A legal agreement between two parties in which each agrees to do, make, buy, or sell a good or service, or in which one party grants a right or undertakes an obligation, often in exchange for a fee. A contract is less commonly called a binding agreement. See also: Option contract, Futures contract.

2. Informal for a unit of trade in options and futures.

contract

1. In futures trading, an agreement between two parties to make and take delivery of a specified commodity on a given date at a predetermined location.
2. In options trading, an agreement by the writer either to buy (if a put) or to sell (if a call) a given asset at a predetermined price until a certain date. The holder of the option is under no obligation to act.

contract

a legally enforceable agreement between two or more parties generally relating to a TRANSACTION for the purchase or sale of inputs, goods and services. A contract involves obligations on the part of the contractors which may be expressed verbally or in writing. Formation of a contract involves one party making an offer to the other party which must then be accepted by the latter party. For example, one firm may offer to supply a product to another company at a given future date and on specified terms. In return, the latter company would agree to pay a specified sum of money as consideration for the product to be supplied. Both parties would then be legally bound to honour their agreement to sell and to buy the product. In the event of either party failing to comply with the terms of the contract the other party could seek damages for breach of contract through the courts.

A complete contract stipulates each party's responsibilities and rights for every contingency that could conceivably arise during the transaction. Such a complete contract would bind the parties to particular courses of action as the transaction unfolds, with neither party having any freedom to exploit weaknesses in the other's position. It is difficult to develop complete contracts since parties to the contract must be able to specify every possible contingency and the required responsibilities by the contracting parties; stipulate what constitutes satisfactory performance; make the contract enforceable; and have access to complete information about circumstances surrounding the contract.

In practice, most contracts are incomplete contracts in which precise terms of the contract cannot be fully specified. In such situations, one or other parties to the agreement may be tempted to take advantage of the open-endedness or ambiguity of the contract at the expense of the other party. See ASYMMETRICAL INFORMATION, MORAL HAZARD.

In addition to contractual relationships between a firm and its external suppliers/ customers, organizational theorists have paid particular attention to the role of contracts in the internal relationship between the employees (‘agents’) and owners (‘principals’) of a company in running the business. See PRINCIPAL-AGENT THEORY entry for details. See also CONTRACT OF EMPLOYMENT.

contract

a legally enforceable agreement between two or more people or firms generally relating to a TRANSACTION for the purchase or sale of goods and services. Contracts may take a standardized form, with the same conditions of exchange being applied to every one of a large number of contracts, for example, airline ticket contracts. Alternatively, contracts may be lengthy and complicated because they are carefully tailored to a specific transaction such as the contract to build an office block for a client.

A complete contract stipulates each party's responsibilities and rights for every contingency that could conceivably arise during the transaction. Such a complete contract would bind the parties to particular courses of action as the transaction unfolds, with neither party having any freedom to exploit weaknesses in the other's position. It is difficult to develop complete contracts since parties to the contract must be able to specify every possible contingency and the required responses by the contracting parties, to stipulate what constitutes satisfactory performance, to measure performance, to make the contract enforceable and to have access to complete information about circumstances surrounding the contract.

In practice, most contracts are incomplete contracts in which the precise terms of the contract relating to product specifications, supply or delivery terms cannot be fully specified. In such situations, one or other parties to the agreement may be tempted to take advantage of the open-endedness or ambiguity of the contract at the expense of the other party. See ADVERSE SELECTION, MORAL HAZARD,ASYMMETRY OF INFORMATION, ASSET SPECIFICITY.

contract

A legally enforceable agreement. Its requirements are

• Competent parties
• Subject matter
• Legal consideration
• Mutuality of agreement (also called “meeting of the minds”)
• Mutuality of obligation

As a general rule, oral contracts are enforceable unless they relate to real estate or are incapable of performance within one year, guarantee the debts of another, or are evidenced by some writing signed by the person sought to be charged (“This is to confirm our agreement…”) There are other exceptions, but they are not relevant here. It is often difficult to enforce oral contracts because the parties usually have differing recollections of the exact terms of the agreement.

References in periodicals archive ?
Seeking to provide SOT for all hardworking and dedicated casual and contractual employees of the government, Sen.
The contractual Assistant professors work five days a week while being provided only with a basic salary.
Other contractual employees who are in dire financial straight appealed to Belmonte for the immediate release of their salary this month.
Pir Hamidullah Shah, lawyer for several petitioners, said his client along with other WWB contractual employees had been staging protests for service regularisation for many years but to no avail.
one to scale-five, while employees from scale up to 14 a committee comprising provincial ministers was constituted and had made commitment to regularize all contractual employees from scale one to five without conducting test or interview.
Record received by online shows that one Mehwish Riaz submitted an application to the FPSC for promotion and regularization of 31 contractual officers.
The Ombudsman Institution expresses its belief that the courts will take into account the recommendations of the Ombudsman issued in such cases, in accordance with existing regulations, since such treatment of the heating service is caused by the disadvantage of one of the contracting parties, which makes each contractual relationship null and rebellious in court, and at the same time produce obligations for the respondent.
He said the contractual staff is part of the KMC manpower like regular employees and this is our utmost desire to solve their all problems including payment of salary on timely basis.
The case deals with the issue of insolvency of a contractual supplier of bunkers during the performance of a contract, and the legal consequences and prospects of recovery when a ship-owner requested a supply of bunkers from a contractual supplier, who in turn ordered bunkers from a physical supplier.
Kejriwal, it is learnt, has sought proposals from its various departments by November 15 regarding regularisation of contractual employees.
New York: Governments or other public sector entities that enter into public-private partnerships (PPPs or P3s) for the delivery of infrastructure can face potential credit implications derived from contractual availability-payment PPP obligations as well as from contingent PPP obligations, according to Moody's Investors Service.
This textbook leads paralegals through basic contract law, incorporating examples of how to draft and interpret different types of contracts, and addressing offer, acceptance, the legality of subject matter and contractual capacity, contractual intent, contract provisions, remedies, drafting simple contracts and proving their terms in court, and other topics.