Contracts Management

A contract is a mutual agreement between two persons in the form of a written document that is legally binding and valid once it is signed with the consent of the two parties. A contract proposal offers various guidelines, rules and regulations, instructions which both the parties agree upon and then finalize as an agreement.

A contract comprises a number of terms and conditions that both the parties are supposed to perform.In order to make a contract proposal legally valid, it must comprise the following elements:

Genuine Consent: There must be genuine consent between the parties. For a contract to be legally valid, no one can force another to sign an agreement. If any of the party cheats, misrepresent, or uses undue influence to complete a contract, the contract will not be considered legal. If the representation is done innocently and without deliberate knowledge or intent to deceive the party, the suffering party can sue for the loss.

Content: One should check the other parties details thoroughly so that there is minimal scope for being cheated, misled or misrepresented before entering into a contract. Note that it is important to check beforehand whether the concerned person who signs on behalf of the organization is the authorized signatory or not.

Legal Motive: To prepare a contract, the motive should be clear so that the contract documents all legal considerations between the two parties. When a contract is between family members, more care should be taken. It must be checked whether the contract covers all aspects to ensure there are no conflicts or misunderstandings in future.

Offer or proposal: An offer is a proposal which outlines the terms and condition which one party offers another. The offer may be accepted or rejected. If accepted, a contract is created to reflect the mutual benefits and consideration of the parties who entered into the legally binding contractual relationship. An offer can be canceled by the first party if it is not accepted on time. Usually, an offer can be finalized based on the mutual consent of both parties.

Here are some essential elements that are integral to a contract:

Types of contract: A contract should specify if it is on a permanent or temporary basis. This would reflect the mutual agreement between the parties.

Methods of handling the proposal: The nature of a contract proposal determines the method by which it should be handled. This means that a corporate contract proposal would be handled differently from a real estate proposal or an educational contract proposal.

Consider an example to understand this. Suppose a contract proposal pertains to a project of research of a public university. The terms and conditions of the contract do not involve the faculty or the staff because they are not authorized to negotiate. It is the Head of Department and the Dean who would satisfactorily address such issues. Let's break down the process into simple steps.

Step 1: Request for Proposal (RFP) sets forth the terms and conditions in a proposal to the bidders of the project. Step 2: Complete all approval procedures as per University norms in the context of no-risk clearances Step 3: Statement of Work Step 4: Project Budget Step 5: Any other documents that are required

Step 6: The proposal is sent to the Head of Department and the Dean. Then it is passed to the Office of Research by the Dean. If there are no other departments that are involved, the proposal is directly sent to the Dean.

Disclosures in Proposals: Certain information like the budget, nature of the business, project details, and so on, are the requirements that one company examines before accepting or moving forward into an agreement. Therefore, the disclosures that are made in the process are considered inviolable and confidential whether it results in an agreement or not. It is advisable to insert a confidentiality disclosure clause in proposals so that this information is legally validated as non-discussable with a third party at any point of time.

The process of contract proposals is not as complex as it sounds. In fact, it is a fairly simple, logical and essential phase of contract finalization. The reason for extreme care and caution is exercised to ensure the legal enforceability of disputes in the event of unpredictable circumstances that may alter the purposes on which the agreement was based.

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