A contract is an obligatory accord between two or more people or parties. Once the parties sign a contract, a binding arbitration or a court of law can enforce it. For it is hard to sign legal contracts under pressure, the contract acts as the representation of a binding agreement. For any contract to hold, both parties must be willing to cooperate and sign the agreement (Mallor, Barnes, & Langvardt, 2001). The state and federal laws recognize the notion of violation of contract and thus give room for the affected party to file a lawsuit against the violator. Being a legally binding document, a contract must contain mandatory information and basic elements that delineate the terms of the agreement. This information helps in the event of litigation to identify the party that went against the terms of the agreement. This paper aims at analyzing a personal services contract between the State of Washington and a services firm.
A scenario where the contract is applicable
This contract would be applicable in a situation where the state is in need of services rendered by architects like architectural design. At times, the government institutions may be in need of implementing a state development project that involves the establishment of various structural buildings or bridges. However, architects and other professionals working in government institutions might be occupied with other assignments prompting the relevant institution to look for services from a private architect. In such a case, the state would have to inform the architect about the nature of the job and the duration within which it needs the work to be complete. This information would help the architect to determine the right number of staff to assign to the task and plan for the service delivery process.
Parties involved in the contract
This contract involves two parties. One of the parties is the state of Washington, referred to as the agency in the contract and the service firm, referred to as the contractor in the contract.
As aforementioned, a contract is a binding document that outlines the duties of every party in an agreement. In this context, this particular contract is being used to outline the responsibilities of the parties involved in the agreement. The contract outlines the tasks given to the contractor as well as the period of contract. Hence, it would be possible for either party to file a litigation incase the other goes against the terms of the contract. Besides outlining the duties of the contractor, the contract also outlines the obligations of the agency. Every institution is expected to pay for the services rendered to it. Hence, another objective of using this contract is to show the compensation the contractor expects to get at the end of the contract and upon completing his or her duties.
At times, the agency and the contractor might contradict on matters to do with reimbursement of expenses incurred during contract implementation process (Mallor, Barnes, & Langvardt, 2001). Such expenses include travel expenses and accommodation among others. The reason why this contract is used is to shed light on these issues. The contract outlines all the reimbursable expenses thus avoiding chances of the parties being locked in disagreement in the course of contract implementation. Upon agreement, the parties involved in a contract append their signatures. The same case applies to this contract. The objective of using this document is to ensure that both parties agree on the terms of contract and vow to stick to them. Hence, in case of any disagreement the document may work as evidence that the parties agreed before embarking on the implementation process.
Third party beneficiaries
Some contracts do not only involve the agency and the contractor alone. At times, there are third parties who benefit from the contract either directly or indirectly like in this case. The beneficiaries comprise the staff provided by the contractor to help the agency achieve its objectives. The main role of these beneficiaries is to attend to the services stipulated in the contract. The contractor will send a number of staff to the agency to offer the required services. The staff will benefit indirectly from the contract since it will earn them some income.
Laws governing the contract
In Washington, both state and federal laws protect service contracts. The main objective of these laws is to make sure that none of the parties involved in any service contract is exploited. At times, parties may agree on a contract and in the course of its implementation, one of the parties realizes that he or she will not achieve his or her expectations. At such a juncture, this party may opt to move out of the contract. The state has come up with laws to protect chances of one of the parties walking out of a contract after the agreement. The laws give the parties a window period to cancel the contract and after the period expires, none of the parties can walk out.
Government institutions are not allowed to place all types of services under contractors. Prior to placing any service under contract, institutions have to ensure that the service is crucial to the institution, the agency does not have the relevant expertise, or there are no available public resources to work on the service. In this context, one of the state laws protecting the contract is the Chapter 39.29 of the Revised Code of Washington. This law gives the director of the Department of Enterprise Services the mandate to come up with all the requirements of the contract. Besides, the law outlines the circumstances under which the parties might alter the terms and conditions of the contract. In addition to giving the director the responsibility of brokering the contract between the agency and the contractor, the law also sets conditions under which the state may fund the personal service contracts. Hence, it helps in ensuring that the state funds only the projects that are significant benefit and that no public resources are available to implement them.
Fairness of the contract
For a contract to be fair, it has to consider the interests of all involved parties in the contract. A contract biased towards one of the parties cannot be fair (Fehr, Klein, & Schmidt, 2007). This sample contract is fair. The contract puts into consideration the interests of all the parties to the contract. For instance, besides stating the compensation the contractor will get after completing the contract, it also offers to pay the contractor other expenses incurred during the implementation process. Moreover, the state places the contract under the Department of Enterprise Services, which ensures that the best contractor wins the contract.
Nature of the contract
A contract is integrated “if it contains all the terms of the agreement and on the other hand, a contract is partially integrated if it leaves out some of the terms of the agreement” (Allcock, 2007, p.340). In our case, the contract is integrated. The contract is comprehensive and contains all the terms of agreement between the agency and the contractor.
In spite of the parties agreeing on a contract, it might reach a point where one of the parties might go to court claiming that the other one violated the terms of the contract. If such a scenario occurs, the court might require parole evidence to pass its judgment. One of the parole evidence that might be used in questioning this contract is the contract ambiguity (Berrios, 2006). In any contract, the central question focuses on the ambiguity of the contract. The law has the mandate to determine if the contract is ambiguous or not. At times, both parties may claim that the contract is unambiguous but the law state otherwise. The court may go through the contract to determine if it can be interpreted in two different ways. After identifying that it is possible to interpret it in two ways, then contract ambiguity would be an enough parole evidence to question the credibility of the contract. For instance, this contract stipulates that payments will come “not more often than monthly.” While one party might understand that payments will be on a monthly basis, the other might understand that they will be coming after more than a month. Such ambiguity may lead to the parties contradicting.
Assignability of rights
In a bid to tell if a contract is assignable, one needs to look at the obligations set out by the contract (Allcock, 2007). In spite of this contract binding the agency and contractors to the terms of contract, it does not in any way limit chances of the contractor assigning the contract rights to a third party. Hence, this contract is assignable. One of instances where this contract may be assigned is if the contractor senses that the security will appreciate in the near future. In this case, the contractor may opt to assign the contract to another party at the appreciated value, which would help the contractor make a profit from the contract before its maturity time.
In a bid to protect all the involved parties during the assignment, it is imperative that the contractor ensures that no alterations are made to the initial contract before transferring it to the third party. A contract becomes invalid if it changes the duties and responsibilities of the other party. Hence, to protect all the parties, the contractor needs to ensure that no additional obligations are passed on to the third party while at the same time the agency is satisfied by the end of the contract.
A contract is an obligatory document that binds two parties. Once the parties enter into a contract, a binding arbitration can enforce it. A contract outlines the duties and responsibilities of each party as well as the duration for which the contract lasts by putting into consideration the interests of the parties involved for the sake of fairness. For a contract to stand, it has to be free of any ambiguity. Ambiguities might act as parole evidence, therefore, affecting the credibility of the contract. In such an instance, the court comes in to solve the dispute between the parties. If the contract does stipulate that the contractor should not assign the contract to a third party, then the contract is assignable. Nevertheless, the contractor has to ensure that no additional obligations are passed to the third party.
Allcock, B. (2007). Restrictions on the assignment of contractual rights. The Cambridge Law Journal, 42(2), 328-346.
Berrios, R. (2006). Government contracts and contractor behavior. Journal of Business Ethics, 63, 119-130.
Fehr, E., Klein, A., & Schmidt, K. (2007). Fairness and contract design. Econometrica, 75(1), 121-154.
Mallor, J.P., Barnes, T., & Langvardt, A. W. (2001). Business Law: The ethical, global, and e-commerce environment (13th ed.). Chicago, Il: McGraw-Hill.