A legally binding payment contract must have an agreement and a consideration. Within these, legalities such as the offer, terms, performance, conditions and liability must appear to make it binding.Continue Reading
The agreement components of payment contracts must include both offers and counter-offers, and there are oral and written contracts. Oral agreements are fine for short-term contracts, but only written agreements are legal for contracts that cover more than a year or any real estate contract. There are also state legal requirements to consider before making a contract.
The consideration component of a contract includes several other addressable provisions, such as conditions and obligations of the contract, performance, payment terms, liabilities and breach of contract. The conditions and obligations of the contract include information on what each party must do to fulfill the terms of the contract. The performance aspect is information on how well each party must perform to meet the terms of the contract.
The payment terms of the contract must include a schedule that states when it is time to make payments, and the liabilities must include a definition of the liability each party must take on to meet the terms of the contract. This section must also include information on what happens if there is a breach of contract.Learn more about Accounting