The benefits offered by contingent contracts are that they motivate parties to perform at or above contractually specified levels. Sports teams and entertainment companies routinely use contingent contracts to motivate athletes and artists.
But contingent contracts are useful not only for motivating individuals. They can also motivate companies. By rewarding outstanding results, contingent contracts motivate outstanding performance. For a contract to be a contingent contract, certain essential elements need to be there. There must be a legitimate contract to do or not to do something. The performance of the contract must be conditional. These are some rules that need to be followed for a contingent contract to be enforceable.
For instance, on the happening of an occasion, on the event not happening and on the event not happening within a specified time. You are commenting using your WordPress. You are commenting using your Google account. You are commenting using your Twitter account.
You are commenting using your Facebook account. Notify me of new comments via email. Notify me of new posts via email. Reading time: minutes. For example, A promises to sell the goods in transit to B, if the ship carrying the goods safely arrives the harbor within eight days. If the ship comes on the ninth day or anytime thereafter, the contract becomes void.
Contracts contingent upon the nonoccurrence of an uncertain event within a specified timeframe : For example, let's say, A contracts to sell the goods in transit to B if the ship carrying the goods does not reach the harbor within eight days. Then, the contract becomes void if the ship arrives on the sixth day or anytime before eight days. On the other hand, if the ship does not come until eight days, the contract becomes valid; it does not matter whether or not it comes or does not come after the eighth day has passed.
Contracts contingent upon an impossible event : If the performance of a contract is dependent upon an impossible event, such a contract is ab initio void, i. In situations such as these, contract terms would seem to depend on one or both parties making a risky compromise based on its predictions about how the future will unfold. When assessing how to close a deal in such situations, negotiators would be wise to consider negotiating a contingent contract.
In virtually any negotiation, parties must make forecasts and assumptions about the future, notes Susskind. Will materials arrive on time for the contractor to meet his deadlines? Will fuel-oil prices remain stable or rise suddenly?
Will the teenager find as many babysitting jobs as she anticipates? For example:. In each of these cases, the party being offered the contingent contract should be happy to take the bet or negotiate it slightly if his or her promises have been truthful. How can you make a contingent contract part of your negotiation behavior? First, outline the scenario that each party imagines will happen in the future. Resource Guides. Most Recent Questions.
Breach of contract? Review of severance agreement and decision to contest How. I am a resident of Florida? What are your fees in Miami? Jump to Section. Need help with a legal contract? Post Your Project It's Free. Get Bids to Compare. Hire Your Lawyer. What Is a Contingent Contract? Essential Components of a Contingent Contract In order to qualify as a contingent contract, an agreement must meet certain criteria and contain several key components.
Types of Contingent Contracts Some of the most common types of contracts used by insurance companies are contingent contracts, including those related to guarantees, indemnity, and providing insurance. Get Free Bids to Compare Leverage our network of lawyers, request free bids, and find the right lawyer for the job. Get Bids Now. How ContractsCounsel Works. Hiring a lawyer on ContractsCounsel is easy, transparent and affordable. Post a Free Project. Get Bids to Review. Start Your Project.
Meet some of our Lawyers Benjamin W. View Profile Get Free Proposal. ContractsCounsel verified. Free Consultation. Ema T. Contract and IP Attorney. David B. Rebecca L. Samantha B. Principal and Founder. Pritesh P. Chief Legal Officer. Richard G.
0コメント