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What is an agreement?
The word agreement is defined as an arrangement between two parties that takes place after much negotiation and which binds the two parties legally as a result of some course of action. In an agreement, one person makes an offer of something to another person and the other accepts the offer, this acceptance of the offer is known as an agreement.
Characteristics of an agreement
Two of the major characteristics of an agreement are:
More than one person
Consensus ad idem
More than one person: For an agreement to take place there must be at least two persons as only one person cannot enter into an agreement by promising himself something.
Consensus Ad Idem: The word Consensus Ad Idem is a Latin word which means “co-occurrence of minds”, i.e. both the parties making the agreement must agree upon the terms and conditions of the agreement with mutual understanding. They must understand their respective duties and responsibilities throughout the period of the agreement.
Elements of an agreement
Two main elements of an agreement are:
Offer/Proposal: In an agreement, a person makes an offer to another person by expressing his willingness to undergo an obligation in return for a promise. The person who makes the offer is known as the offeror and the person to whom the offer is made is known as the offeree.
Acceptance: When the offeree gives his consent to the offeror by agreeing upon the terms and conditions of the agreement it is considered as acceptance.
Types of an Agreement
Some of the types of the agreement include the following:
It is an agreement in which one party normally a supplier agrees to provide certain services to the purchaser better known as the client in return for remuneration.
A construction agreement is an agreement that sets out the date and also specifies the time duration needed for the construction process. It normally takes place between the owner of the project and the person who has agreed to complete it in a given time with the available resources.
A rental agreement is defined as the contract of rent between the owner of the property and the person who is willing to acquire the property for a temporary period of time. A rental agreement defines the parties involved, the terms of rent and the amount to be paid as rent.
It is defined as a legal contract involving at least two parties who wish to share confidential information or material with one another for a specific purpose and access to which is restricted. Non- disclosure agreement is also known as a confidentiality agreement (CA), confidential disclosure agreement (CDA), proprietary information agreement (PIA), or secrecy agreement (SA).
#39 – Confidentiality and Non-Disclosure Agreement
It is an agreement through which one party known as the seller agrees to give something to the other party known as the purchaser in exchange for a certain amount of money that the purchaser has agreed to pay.
The payment agreement dictates a plan of installment to repay the outstanding balance over a defined period of time. Normally these types of agreements take place when the amount to be paid by the debtor is huge so the creditor facilitates the debtor by allowing him to pay the amount in installments taking into account the debtor’s financial condition.
The following points must be considered when writing an agreement:
Contact information of both parties.
Location/state whose laws apply to the agreement.
Terms and conditions of the business relationship.
Terms of payment.
Start date of the agreement.
The end date of the agreement.
Contact Information of both parties: The most important part when going into an agreement is to know the contact information of all the parties involved in the agreement. Contact information will contain the name, address, and phone number of the respective parties.
Location/state whose laws apply to the agreement: It must be made very clear before making the agreement as to whose laws will apply to the agreement. Whether it be state laws or any specific laws which are limited to a certain location.
Terms and conditions of the business relationship: The terms and conditions that would apply to the business must be drafted and understood before establishing the agreement by all the parties.
Terms of payment: The terms of payment must between the parties must be decided prior to entering into the agreement. It must be decided that whether on completion of the work full payment will be given or half of or it will finish off in installments.
Start date of Agreement: The date on which the agreement is effective must be decided and written therein.
The end date of agreement: The date when the agreement will dissolve should be mentioned and the same should be communicated to each party involved.