Contracts – Terms, And Tariffs: Allocating Risks In Uncertain Times

The simplest legal contract is an exchange, and it can be settled by a handshake or a simple "yes," or an "I agree." In business most contracts are settled in writing, in one form or another. The terms and conditions of a written contract might be set out in a detailed supply contract formally signed by the parties, in on-line terms and conditions, in a price quotation, in purchase orders, or sometimes even in invoices. With today's trade related uncertainties, it is a good time to consider whether your contracts are working for or against you.

Contracts are Risk Allocation Devices
Written sales and supply contracts mainly serve to allocate risk between the contracting parties. They state who is responsible for delivering what, where and when, in what condition, and at what price. They often include terms that set out consequences for incomplete performance or non-performance by a party. They may include terms to deal with expected and unexpected changes