Contract Issues in Business

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Contract Issues in Business

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Contract Issues in Business

According to Klass (2010), “a contract is a legally enforceable obligation one person owes another as a result of a formal act or an informal agreement that satisfies the conditions of contractual validity” (p. 27). As a senior manager who can enter into contracts on behalf of the corporation, I have to make sure that the company avoids unnecessary litigation by looking for some specific clauses in any contract that we are about to get into. One of them would be allocation of product liability responsibility, which is a clause that covers how product liability is allocated between the supplier the distributor, which in essentially provides a way for the parties to take liability for injury or damage from the possession or use of the product. Also, I will look for clauses on payment terms, which provides for how and when to pay, as well as addressing late payments and interest charges and invoice disputes. Finally as a buyer/seller, a clause with the pricing terms will be very important. This will also include issues like price of extra costs e.g. transportation, taxes and insurance.

As a law that is charged with regulating commercial transactions within the States of the USA, The Uniform Commercial Code law will definitely apply in the contract, majorly because we transact in different states. Tepper (2014) notes that the main aim of this law is to make uniform the law governing commercial transactions among various jurisdictions in the USA. All the articles therein can apply to the kind of business we do, and it is aimed at protecting us, and protecting other business entities from us.

In drafting the contract, I wouldn’t want to make mistakes that will see us sued, therefore I will consult the corporation attorney, who will help in the legal aspects of the contract. It might seem Naïve to do so, but for sure it helps a lot. Further in the drafting the contract, I will make sure that I avoid ambiguous provisions that might be interpreted differently by the other party.

References

Klass, G. (2010). Contract law in the USA. Austin Tex.: Wolters Kluwer Law & Business Tepper, P. (2014). The law of contracts and the Uniform commercial code (3rd ed.). Boston:

Cengage Learning.




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