The paper will cover the various topics Administering a contract serves the following purposes, Statement of Work, Stakeholder’s requirements, fixed price format and Uniform commercial code. The paper will also cover the various contracts that will be agreed upon by the two companies who will agree on the main agreements of terms for conducting business. The purpose of the administering the contract and the terms of the laying down the work will also be touched upon. Agreements will be filed, and the businesses will work with the various ideas of the contract. Contracts are mostly administered in two different ways that are through a written agreement or a verbal agreement. Contracts play an essential role in business; thus companies spend a designated time while planning and choosing the required type of contract that should be administered between them.
A company should make sure that it follows through with the agreed upon terms of a contract once they have implemented a contract. Many are the times when a business finds itself on the wrong path of a breach of contract whereby they have to adhere or subjected to fines; spend a significant amount of money in court and breaking bounds which leads to the negativity of the organization. However, if a contract is administered and implemented in the right manner, it will reap the maximum business benefits (Harmon & Trends, 2010).
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The significance of administering a contract to a business
The business is formulated to make profits; therefore, maintaining good relationships is a key factor for the business. The company needs to maintain good relationships to come to terms of a contract administration. The resources required for the business to run smoothly come from suppliers, for the suppliers to supply the business with the required supplies then they need to enter into a contract or agreement with the business and the business should leave up to the standards of the contract. In the occasion that any of the two parties breaches the contract then any one of the parties is open to sue the other since a breach of the contract has been noted.
Contracts are very beneficial in maintaining the company’s position. When in a contract certain terms are agreed upon, and both parties should meet their end of the bargain. The documents that have been agreed upon and sign serve as security for the business and may be used in the event that a misunderstanding arises.
Contracts assist a lot when it comes to resolving misunderstandings since they are within a certain jurisdiction. When there is a breach of the contract, then the business can sue, hence resolving the issue in court amicably. Contracts assist in creating a happy environment in the workplace; everyone knows what is expected of them. If it is a contract between the suppliers and the company, they both know what is expected of them and should stick to that contract to the end (Lawrence & Lorsch, 1986).
Statement of work
It is a section in which defines the work specifications, what the business is expected to fulfil in the long run. There are the key responsibilities, work agreements and liabilities that is between two businesses that are agreeing. In some cases, there are times when there is a misinterpretation of the agreed upon terms and conditions, and thus it should be written in a language that both parties can comprehend. When writing the statement of work, the written content can contrast from one business to the other. A statement of work should follow certain set guidelines such as a definition of success, the inclusion of timetable, creation of milestones, use of a language that is comprehensible and it is specific (Lawrence, & Lorsch, 1986).
A statement of work indicates what should be considered a success and what should be considered a failure thus it gives details of successful completion of a given task. Clear definitions of the timeframe of work completion are also included. Creation of milestones if a task is completed within a certain timeframe certain incentives are given. The businesses that have come together to a contract should be in a position of understanding the terms of the business. Thus the language should be free of overly complex terms and words and should be written simply. The statement of work has specific specifications when it comes to the administration of the agreement, and one cannot just say they will “take some time” to complete a given task rather they will specify the required timeframe in which the task should be completed.
Stakeholder’s requirements
These are the expectation of business by the customers, users and acquirers that serve at the business level or enterprise level. The specifications largely define the intent of the business. It serves as a communication served between junior staffs, finances department and other seniors departments and a basis for validation of a business system (Spurgeon, Hicks, Field & Barwell, 2005).
Fixed Price Format
When a client visits a business, there is a contract that they may get into which states clearly the goods or services that are to be administered and their respective prices. The contracts help in saving a lot of time that sometimes is wasted when negotiating and the management to reduce their time wasted. The business should be very cautious when getting into these types of contracts since they demand a lot of resources and may take a lot of their time (Lorsch, 1986).
The contracts work strictly on a stimulated set of rules where the good and services must be delivered or availed within a set duration of time. Fixed price contracts are administered when there are clear and concise estimations of the cost.
Uniform commercial code
The uniform commercial code and laws of a contract are very important when forming a contract. The information is very important for both parties that are the buyer and seller. A business should enter into a contract with competent parties. These are people who are legally and mentally culpable thus can enter into agreements and can be enforced by the law. Persons that are under the influence of alcohol, drugs, under age stipulated by the law or mentally ill persons cannot be declared as sane. Therefore, have a limited capacity for participating in a contract (Scarborough, 2016).
An idea of Consideration is very essential to business contracts, therefore for a contract to be enforced therefore must be a “mutual consideration.” Therefore, under the uniform commercial code there should be performance under the contract for both parties. Valid legal subject matter, where competent parties have come for a legal consideration, a large matter is in question in a way that the law contends. Agreement of the party’s, agreement between two or more parties: intent to fulfill promises and considerations. A person who is part of a contract is one who has obligations but also receives benefits of a given or agreed upon legally binding agreement.
References
Harmon, P., & Trends, B. P. (2010). Business process change: A guide for business managers and BPM and Six Sigma professionals . Elsevier.
Lawrence, P. R., & Lorsch, J. W. (1986). Organization and environment: managing differentiation and integration (Harvard Business School Classics).
Scarborough, N. M. (2016). Essentials of entrepreneurship and small business management . Pearson.
Lorsch, J. W. (1986). Managing Culture: The Invisible Barrier to Strategic Change. California Management Review , 28 (2).
Spurgeon, P., Hicks, C., Field, S., & Barwell, F. (2005). The new GMS contract: impact and implications for managing the changes. Health services management research , 18 (2), 75-85.
