Entering Into Contracts With Goods and Services: Understanding Goods and Services

Entering into any kind of a verbal agreement or written contract with goods and services is serious. Because there may be major consequences or repercussions, caution is vital. If you are an entrepreneur or a new business owner, you need to understand the concept of goods and services, as well as the significance of contractual obligations that accompany verbal agreements and signed contracts.  

What are goods and services?

Businessdictionary.com suggests that goods and services are “the most basic products of an economic system that consist of tangible consumable items and tasks performed by individuals”. 

Because goods and services are marketable, there is a verbal marketing   agreement or written contract set up between two parties in order for an effective transaction to take place. 

What is a contract?

Businessdictionary.com defines a contract as “a voluntary, deliberate, and legally binding agreement between two or more competent parties” suggesting that “contracts are usually written but may be spoken or implied.”

Entering into a verbal agreement or a written contract constitutes a mutual moral, legal and ethical obligation. A person or owner, who does not at least attempt to fulfill the obligations related to in a verbal agreement or written contract risks losing credibility. Once credibility is lost, it is difficult to regain.

Businesses that deal with goods and services can be on a local, national or international level and thus, maintaining global credibility is important. Breaking verbal agreements or contracts constitutes a violation of trust. Breaches of contracts can result in lawsuits or other legal actions, which tend to reflect badly on individuals, families, groups, companies or organizations. They can also prove costly.

On the other hand, a sound verbal agreement or solid written contract with another party can protect you as an individual, as well as others in your company or organization from loss, because they are binding as a two-way process with mutual obligations in both directions. The integrity of both parties is always important.

There is a multiplicity of different kinds of goods and services, verbal agreements or written contracts, but it is always important to know exactly what a verbal agreement or written contact entails, as both can be subject to different levels of interpretation. They may also be subject to different laws on an international level.

Obtaining legal guidance with respect to contracts is important particularly when there are large amounts of money involved in goods and services transactions. Legal help may be necessary if there is concern or doubt about a verbal agreement or written contract, or if problems arise. This can happen at any time, so different kinds of clauses may prove effective.

In any verbal agreement or written contract, both parties should have a mutual understanding with respect to goods or services purchased, as well as the terms of agreement for payment.

Another important aspect is interest or accrued interest. Verbal agreements are often broken and written contracts not honored, so there should be a firmly established, trust relationship first. Business can be unpredictable and losses incurred unexpectedly, particularly in a time of economic decline. At times, businesses may or may not be able to recoup their losses. Companies may go out of business and individuals may lose their jobs.

Awareness and ingenuity are often the keys to surviving these kinds of circumstances or other adverse situations, so caution is the key word when entering into verbal agreements or contracts with respect to goods and services.