The Establishment of Business Contracts
A business contract is based on both parties'acceptance and agreement,which are the outcome of their business negotiation.Therefore,the conclusion of a business contract results from the business negotiation to the satisfaction of both parties.
Business negotiation is the dealings between the seller and the buyer in order to reach an agreement on price,payment,quantity,quality and other terms or conditions of a sale.There are four major stages in business negotiation to conclude a business contract as follows.
2.1 Enquiry
An enquiry is made to seek a supply of products,service or information,such as the commodity's name,quality,mode,the desired quantity,delivery date and other terms.Usually business negotiations commence with an enquiry.
An enquiry,often made by a buyer,includes a general enquiry and a specific enquiry.A general enquiry refers to asking for the general information of a product such as pricelist,catalogue,sample and terms of payment,while a specific enquiry usually expresses clearly enquiries about the specific information of a certain product such as price,quantity,discounts,ways of shipping,packing,etc.
2.2 Offer
An offer is a proposal of terms and conditions presented in a potential contract by one party（the offerer)to another party（the offeree).It can be made by a seller （a selling offer)or a buyer（a buying offer).
An offer can be a firm offer or a non-firm offer.A firm offer is a promise to sell goods at a stated price,usually within a stated period of time.A non-firm offer is just like a quotation subject to final confirmation and is not legally binding.The seller can withdraw it anytime before the buyer accepts it.It is not final.
2.3 Counter-offer
If the offeree does not agree to any or some of the transaction terms of a quotation or an offer,he can show disagreement to some contents,suggests some changes of the terms and conditions in the offer,and states his own terms and conditions to the seller,which is called a counter-offer.In this sense,a counter-offer is an indirect and partial rejection of the original offer.Hence,it is a new offer made by an offeree to an offerer,accepting some terms and changing other terms.
The appearance of the counter-offer indicates that business has to be negotiated on the renewed basis.This process can go on for several rounds till business is concluded or called off.
However,not every transaction is needed to be counter-offered for several rounds.A deal without any disagreement will be accepted directly by both parties.
2.4 Acceptance
If the offeree agrees to all transaction terms of a quotation or an offer made by the offerer,both parties can make a contract and conclude business.This refers to the acceptance of the offer.Hence acceptance is the assent to the terms and conditions of an offer,required before a business contract can be valid.It must be absolute and unconditional.
Actually a business contract is a legal document made by and entered into between a seller and a buyer on the basis of their offer and acceptance.It is often formed when an offer is accepted by both parties,serves as a guide in the whole transaction process and stipulates both parties'right and obligation definitely.