Large, medium, or small companies. It does not matter. Whatever the size of the business, whatever the product or service the company negotiates, business contracts ratify rights and duties. Always.
According to Tiago Serafim, the rationale for this is simple: “the contract is the regulator of all the matters involving what is being contracted, how the works will be performed, the definition of the deadlines, and the consideration, that is, the fees received for the works.”
“It is no coincidence that in the legal world there is the expression ‘the contract makes law between the parties,'” says Serafim in an article published on the website administradores.com.br.
Read also the article by Juliana Assolari:
Relevance of Contracts – Survival of the Business
According to the author, the contract must necessarily contain 5 elements:
- Well-defined object: the object means what the works to be performed will be, which must be specified with great clarity, so that one party does not request what was not contracted, nor the other fail to do something it committed to do.
- Payment conditions: the manner in which the payments will be made.
- Deadline: the deadline is essential, as it defines the time your company will have to perform the work, as well as what your client should expect, thus preventing possible embarrassment and even a strain on the commercial relationship on account of unnecessary demands.
- Penalty: the contract is an agreement of wills, and thus, in the event of non-compliance by either of the parties to the contract, it must contain a penalty both for delay in payment and for delay in delivery of what was contracted.
- Conditions for termination of the contract: every contract must contain the possibility of being terminated, protecting the party that no longer wishes to continue with the contract, but also ensuring that the termination does not come to harm the other party, which has already invested time and amounts to fulfill its obligations. Thus, a termination clause must observe the entire context of the contract, so that neither of the parties is harmed.