Contracts are defined as a legal and written agreement between two or more parties, who are enforced by law. A contract has six essential elements to be enforceable. The details provided in the contract needs to be enforced. Acceptance of the contract by the two parties represents that the entire clause are agreed by them (McKendrick, 2014). Consideration or money might be exchanged by the two parties, signing a contact. The term of the contact needs to be clearly identified. The intent of both the parties to carry out their promise has to be ensured.
Three Potential Clauses that Might put a Company at Risk are:
Subcontract: Either of the parties entering into a sub-contact of the signed contract.
Attorney’s Fees: One of the parties would bear all the cost incurred as attorney’s fees.
Choice of Law: Enforcement of the choice of law of one of the parties.
From the perspective of a senior manger the above mentioned potential clause might prove to be disastrous for the company. Signing of subcontracts between the parties, who have already signed the contact, might lead to further legal complications. Moreover, implementation of law cannot be by choice. Hence, none of the parties can choose they want to abide by. Inclusion of these clauses, and signing of any agreement having these clauses, might result in termination of the senior manager, as a penalty of the loss incurred to the organization.
Uniform Commercial Code would be applicable to the contract. The Uniform Commercial Code is a unified law suit that puts the sales and commercial laws together under one head, across US (Poole, 2016). If the contract sign enforces one of the three clauses that might cause potential loss to the organization, then the contact law could be enforced such that the contact does not involve the three clauses mentioned above.
In case of dispute in the contract, the government cannot assist since the clauses have been agreed upon in the contact. Hence, a contract needs to be read thoroughly before it is signed by two parties. After both the parties have signed, disputes are not solved by the government, since it would result in breach of contract.
References
McKendrick, E. (2014). Contract law: text, cases, and materials. Oxford University Press.
Poole, J. (2016). Textbook on contract law. Oxford University Press.
