Commercial contracts are legally binding agreements between two or more parties. The contracts usually stipulate the expected behavior between these parties in a commercial setting.
Most commercial contracts are usually in written form and contain provisions for what each party or parties are to do, in short, the objective of a commercial contract is to capture the business objectives of the parties to the contract.
All aspects of business including the nature of relationship between the parties, hiring policies, loan provisions, payment terms and security provisions can be stipulated in the commercial contract. A breach of this contract occurs when one of the parties bound by the contract does not live up to their expectations.
Commercial contracts are also commonly used to stipulate the terms of a transaction. In these scenarios one can find several types of commercial contracts, including but not limited to:
- Definite quantity contract – this type of contract binds all the parties to ensuring that a specific quantity of supplies is delivered at a specific time.
- Fixed price contracts – these have a provision for price adjustment with an upper limit known as the ceiling price. The price is only adjustable if other clauses in the contract are triggered.
- Time and material contract – this type of contract defines the acquisition of supplies in terms of labor hours paid at fixed hourly rate.
Commercial contracts cover a broad range of legal services needed. At Sodagar & Company, we can assist you in drafting effective commercial contracts as well as assist you in prosecuting or defending breaches of commercial contracts. Please contact us to see how we can be of service to you.