The terms «agreement» and «contract» are often used interchangeably, but legally they are two different things. An agreement is an agreement between two or more parties. A contract is a specific agreement with conditions enforceable in court. A commercial contract is essentially an exchange of promises and can be verbal or written. For example: the manager of Company A goes to the manager of Company B and asks him to provide a number of parts necessary for their product. Manager B agrees and they tremble. It is an agreement, but it is not a contract. If the two managers sit down and write that A buys 1,000 pieces of B and signs both, it`s a contract. A contract has the weight of the right behind it, but the agreement cannot. Most contracts never see a courtroom and they could be verbally easily, unless there is a particular reason for the contract to be written. If something goes wrong, a written contract protects both parties.
If one part of a valid (opposable) contract believes that the other party has broken the contract (the legal clause is violated), the aggrieved party may sue the party it believes has violated. There are six essential elements necessary for a contract to be valid (enforceable through the courts). The first three, which are considered together, refer to the agreement itself and the other three relate to the parties who enter into the contract. Legality should be the simplest part of the contract. This means that the terms and conditions must be legal; If not, the contract is not valid. For example, the sale of a photocopier is legal; Breaking into a closed store in the middle of the night, stealing a photocopier and selling it on an online shopping site is not the case. For more information on abusive contractual terms, please visit the ACCC website. Contractual guarantees are less important conditions and are not fundamental to the agreement. They cannot terminate a contract if the guarantees are not fulfilled, but they can claim damages for the losses incurred. Oral agreements can sometimes create legally binding contracts, but only if there are the appropriate legal elements of offer, acceptance and consideration in the interaction. But there are a few that have to be written by law, which is known as the law of fraud.