Evolution of contracting , Business Law and Ethics

Evolution of Contracting 

Contracts have evolved over centuries. It is a lawful binding relation between two or more parties. The contractual relationships can occur - from a small project to a corporate takeover or treaty between nations. These are specific tangible elements and codes that are structured  according to the laws of the country in which they are written. 

In some countries, contracting parties like to meet with a verbal and handshake agreements for informal promises or trades of goods and services. 

During the past few decades, contracts have undergone many changes because of globalisation in our economy, outsourcing, deregulation and the types of competitors. The mode of contracting has become easier because of the usage of Internet. 

With all these changes, agreements written a decade ago seem simple in comparison to present agreements. This revolution in the contract structure, content and format has occurred because of the changing roles of contracts in today?s business world. 

Contracts have evolved from a simple document to a dynamic and powerful tool with far-reaching implications for long-term business and personal relationships.  

Let us see an example of the development of contracting taken from the article „An Unlikely History of Contracting? by Gary L. Sturgess published in the Journal of International Peace Operations.  

Two hundred years ago, British and Irish convicts were transported to Australian colonies by private contractors. In 1787, Australia?s first convict fleet contract was won by a naval contractor, William Richards following a public tender. Richards supplied six ships and he had to make provision for food for about 800 convicts and their guard of marines for a period of eight months. Richards was paid a flat rate per month for each ton of shipping and another separate rate per  convict-day for food provisions. This was similar to the contracts the Navy Board had developed for the shipment of troops to various parts of the world. 

The second contract was rewarded in 1789; this time with the objective of minimising costs. The contract marked a flat rate which transferred the risk of delay. The mortality rate of convicts was high enough to attract the attention of the authorities which received complaints of negligence. To prevent further negligence of such kind by the contractor, there was an enquiry and criminal prosecution, and the Home Department argued that the contractor should be paid for the number of convicts actually landed rather than taken on board. Hence the payment was modified. A bottleneck faced in implementing this mode of payment was that the contractors were not prepared to accept the complete transfer of outcome risk to them.  

This kind of contract dropped the morality rate of the contractors substantially. The only danger that the governing authority or the contractor faced, comprised certainties of ocean travel, thus minimising the probability of ill treatment of persons on board by the contractor. The example explained was a performance based contracting.  

Thus, we can conclude that the following actions need to be incorporated for successful contracting: 

  •   Good contract design. 
  •   Selection of a socially responsible provider. 
  •   Sound contract management by public officials.  
Posted Date: 9/27/2012 2:46:35 AM | Location : United States







Related Discussions:- Evolution of contracting , Assignment Help, Ask Question on Evolution of contracting , Get Answer, Expert's Help, Evolution of contracting Discussions

Write discussion on Evolution of contracting
Your posts are moderated
Related Questions
Question: (i) Define the term "conflict", "grievance" and "dispute" (ii) What are the key elements of a conflict? (iii) Describe the transformation process of a

Question 1 - Hatfield owned a large farm on which he grew grain. His combine was inadequate in relation to the acreage of grain that he harvested annually. As a result, on seve

Differences between Liquidators and receivers: There are also significant differences: (a)a liquidator has numerous statutory powers. A receiver must rely on the powers given

Q. Cross agency actions - addressing phoenix activity? the ASIC, ATO and FWO all have responsibilities in investigating and monitoring elements of phoenix activity. This means

Determine the agenda-setting process The "agenda" is the list of subjects or problems to which government officials, and people outside of government closely associated with t

Concept of Authority - Agency Law Whether this is the oral or written permission conferred on a person through another to do a particular thin.  Thus it is a factual concept a

QUESTION 1 Discuss the position in UK with respect to the Capital Maintenance Doctrine. QUESTION 2 (i) What are the essential requirements of a valid Asset Protection T

Define the term - authoritative government decision We can sum up by way of saying that the intent to implement a policy is not the same thing as a real policy. Failure to impl

Fraudulent concealment of a book: Hence it is nothing to him where dividends are properly or improperly declared, and provided he discharges his own duty to the shareholders.

Right to prior repayment: Therefore this was not variation of class rights since the existing preference shareholders had the same number of shares (and votes at a class meeti