The creation of a contract is a process that involves various key aspects or steps in order to ensure that the contract is fair and its stipulations feasible. Key aspects of contract creation guide the manner in which a contract’s content is created. As a result, those aspects also act as a reference point in the event some of the stipulations are not clear or certain parties getting into the contract does not agree with some stipulations. The steps to contract creation are vital to the success of that very contract, thus the significance of some of the steps or aspects of a contact. Understanding the significance of certain concepts, aspects or steps of contract creation is important because it facilitates proper contract development and creation. The aim of this paper, therefore, is to describe the significance of certain concepts that are considered in the event of contract creation.
Owing to the fact that a contract is a legally binding agreement between two parties, it is important to observe certain concepts as their significance facilitates effective contract development. For instance, obtaining stakeholder input from department managers that will be affected by a contractor's performance is important (Gordon, 2008). This is because the input of stakeholders facilitates the contractor’s understanding of stakeholders’ objectives and expectations. Therefore, thus meets those expectations through developing and creating around those very objectives and expectations.
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The input of a stakeholder can also ensure that the contractor’s performance is positively influenced by providing guidelines on how to best develop the contract (Gordon, 2008). Since stakeholders are an important aspect of any organization, it is important to obtain their input since it is a show of good faith that eventually helps in improving the chances of developing an effective contract and obtaining positive results from such a contract.
It is also important to send a request for proposal before a contractor presents an offer. This is because, through the proposal, it is possible to establish the direction a contractor intends on taking in a bid to ensure it is in line with organizational objectives, aims, and goals. The proposal also provides a platform for the addition of information or conditions in a contract to help in improving the chances of developing and creating an effective contract. The proposal ensures that corrections can be made with regards to what a contractor intends on offering to avoid needing to later the final contract (Porter-Roth, 2002). Requesting for a proposal also saves time during the development and creation stage of the contract since there is no need for many alterations as that would have already been done during the proposal stage.
Request for proposal should contain a reference to provisions in a legal code such as the Uniform Commercial Code (UCC) because of the significance of the same. One reason why the same is important is that it provides the legal aspect of the contract, which facilitates understanding of the observations that should be made with regards to a contract. Including such a reference also ensures an organization enters a contract with legal codes it can be able to meet and observe, thus facilitating convenience and establishing the financial and organizational capability of entering into certain contracts (Porter-Roth, 2002).
Lastly, it is also important to select one UCC provision, list its identifier, and describe what the provision covers. This is because such will provide an actual picture of what to expect when entering into a contract with such a legal code. Through a list of its identifier, an organization is able to establish why certain provisions exist and the risks of going against the same, as the list provides a clear reference point with regards to the legal aspect of the contract (Oberman, 2016). Similarly, a description of what a provision covers provides all the necessary information parties entering into a legally binding agreement require, thus the significance of this concept.
References
Gordon, S. (2008). Supplier evaluation and performance management excellence . Boca Raton, Fla: J. Ross.
Oberman, N. G. (2016). Transfer of risk from seller to buyer in international commercial contracts: A comparative analysis of risk allocation under the CISG, UCC and INCOTERMS. Trabajo no publicado .
Porter-Roth, B. (2002). Request for proposal: A guide to effective RFP development (pp. 1-293). Boston: Addison-Wesley.
