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Contract Principles in Business Essay

Contracts are legally binding agreements for inter-business transactions to facilitate the supply and purchase of products or services. The purchasing strategies must align with the existing requirement defined in the legality of contracts (Albarran & Snelling 2009). This paper explores the importance of understanding the legality of contracts as a purchasing professional. In a bid to meet this outcome, the paper recalls some of the possible impacts in cases where these professionals do not understand the legal issues surrounding purchasing in contracts.

Importance of Understanding Legal Issues in Contracts


Any person who takes the duties of purchasing services and products in place of a company must have an integrated knowledge of contract law. As theorists stipulate, limited knowledge is dangerous whereas complete lack of know-how is disastrous (Kousky, Walsh, & Zeckhauser 2007). If purchasing professionals do not comprehend the requirements of making organizational purchases, then they may face legal charges for misconduct without knowing they made any mistakes.

In essence, they must know the main content of the contract incorporating offers, considerations, and targets to create legal relations. Understanding the basic contract requirements allow the professional to avoid the misconceptions that contracts must be written or may be changed unilaterally without prior consultations. Others may assume that they can end contracts as they wish. The silence where purchasers assume full roles of other members bidding in an agreement does not dictate any consent.

Terms and Conditions

These professionals must be aware of the effects of silence instead of concise investigation to assess the terms and conditions of a contract (Barrett 2001). The terms and conditions may vary from one vendor to the other. In most cases, vendors use the terms and conditions to enhance successful sales. If they are not assessed properly, the professional trusted with the role of purchasing can sign a contract in which the terms and conditions limit the expected achievements.

In another perspective, the suppliers may also fail to abide by their terms where they expedite deliveries and infringe contracts. The purchaser should know the risks to check within the contract including insurances, rejection, quality, damage, failure, and delivery among others (Davies 2013). Otherwise, the failure to pay attention to the associated risks may lead to losses linked to poor quality of supplies or under-standard products and services.

Termination and Dispute

An agreement on the process of termination and dispute placement allows the company to prevent frustrations, ensure mutual agreements, and determine how to handle breaches. The disputes must be resolved in an equally satisfying way. A practitioner working in this field must understand the laws that affect the smooth running of the business (Srivastava 2012). The law allows a practitioner to identify the most relevant factors affecting the organizational progress in issues regarding contracts.


Practitioners hedge their selling risks by indicating the quality of products that can be availed in a contract. In this way, the buyer should see the prototype products or services before deciding to start a purchasing contract where the features of such products are indicated depending on the real ones. A practitioner avoids mentioning qualities that are not contained in the products and services for sale in order to prevent contradictions.

All these requirements should be properly documented and stored for reference in any demanding situation (Oppenheim 2011). Some other attributes to consider when purchasing include fairness, regulation against customer exploitations, consumer credit act, and industry regulations. This attribute protects against misinformation, insufficient details, and check up of contrary purchase terms and conditions.


It is vital for the contracting practitioners to understand the legal issues in order to ensure that procedures are followed strictly. This understanding ensures that the professional do not work outside the legal boundaries and standards stipulated. Otherwise, they may be subjected to court summons in respect to contract regulations and company’s standards.


Albarran, J & Snelling, P 2009, ‘Professional, Ethical and Legal Issues’, Practical Resuscitation for Healthcare Professionals Moule/Practical Resuscitation for Healthcare Professionals, vol. 4, no. 2, pp. 7-19.

Barrett, M 2001, ‘Latex Gloves: Medical-Legal Issues For Health Care Professionals’, Journal of Legal Medicine, vol. 22, no. 2, pp. 263-281.

Davies, P 2013, ‘Construing Commercial Contracts: No Need for Violence’, Current Legal Issues Volume 15 Law and Language, vol. 9, no. 13, pp. 434-456.

Kousky, C, Walsh, S & Zeckhauser, R 2007, ‘Options Contracts for Contingent Takings’, Issues in Legal Scholarship, vol. 6, no. 3, pp. 342-376.

Oppenheim, C 2011, ‘Legal issues for information professionals X: Legal issues associated with cloud computing’, Business Information Review, vol. 28, no. 1, pp. 25-29.

Srivastava, A 2012, ‘Legal Understanding and Issues with Electronic Signatures’, Electronic Signatures for B2B Contracts, vol. 6, no. 2, pp. 105-127. Web.

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"Contract Principles in Business." IvyPanda, 2 Oct. 2020, ivypanda.com/essays/contract-principles-in-business/.

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IvyPanda. (2020) 'Contract Principles in Business'. 2 October.

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