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Contract law is derived from the fact that business operates in the market system, wherein economic activity transpires for the exchange of commodities or commodity-derivatives [i.e. money]. Individual possessors of commodities/money meet in the marketplace and freely enter into negotiations to determine the terms upon which they are willing to exchange those commodities/money. Contract law facilitates, regulates and ultimately enforces such market activities.

Contracts are "legally binding agreements" between two or more persons intended to realize a particular purpose. The initiating person extends an offer to another person to either do something or refrain from doing something, upon which the recipient person has the opportunity to accept such offer and thereby form the basis for a contract. Acceptance of the offer, in principle, validates the contract [although there are specific circumstances under which a purported contract me be invalidated to two other legal discrepancies].

The Importance of Quality Contracts

Contracts are the lifeblood of commercial business transactions. Contracts provide the framework through which business relationships are controlled, enabling each of the parties to attain their agreed upon benefits, while providing appropriate protections against violating the settled terms and conditions. In turn, the value of an excellent contract, which has been skilfully negotiated and properly written, is rarely evident - until one of the parties attempts to breach the contract (with the potential for such a violation having been substantially reduced by the knowledge that any violation will have serious repercussions).

Conversely, when contracts are poorly negotiated and/or written, they can become a source of unending anguish and drain on a business' financial resources. Experienced contract negotiations and drafting will enable you to avoid these disasters, by avoiding the traps and pitfalls that other businesses all too frequently fall prey to. You should always be looking to solidify your business relationships with well-structured contracts, so that you can focus on your core business and not the distractions that arise from disputes that lack a clear contractual formula for resolution.

Christopher R. Neufeld

Neufeld Legal Professional Corporation

1600, 144 - 4th Avenue SW, Calgary, Alberta



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