Contracts

Contracts as Agreements

Contracts do not have to be written down, although in order to reduce potential conflict, most contracts are written. Many contracts are simply implied. For example, a patient who is treated by a dentist would be expected to pay the going rate for such services. To not pay the dentist would be in breach of contract by the patient, even though there may not be a written agreement. However, by visiting the dentist and allowing work to be done, an agreement was in place, even though this was likely verbal. However, in order to ensure that there is a clear understanding over what has been agreed to between two parties, the details of the contracting arrangement are often written down and signed by both parties in the form of a contract. Contracts specify the details of an agreement between two parties, such as between a house buyer and a builder to build a house. The contract typically specifies the obligations of each individual or organization, the amounts to be paid and when, and any allowances, bonuses, or penalties should certain events occur, such as if a certain time limit is exceeded. In a building contract, for example, there are two parties—the builder and the house buyer.

In the contract, the builder agrees to build the house, as set out in a set of detailed plans; the buyer agrees to pay a certain amount, once each stage of the house is completed. With any contract, there are what Émile Durkheim called noncontractual elements. For a contact to be entered into, there is a set of norms and rules that govern how a contract may be established. Decisions about which form of contract to use and how to tender it are embedded in individual and organizational values and knowledge about the utility of each of these contracts. These are not necessarily written down, although some norms accepted at a societal level may become enshrined in legislation.

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