Use the futures contract to cover the venture and risks of future price changes. For example, consider an apple gardener who expects to harvest 20 tons of apple in the next 6 months. Given the fact that the price of apple is uncertain in the next six months and there is a likelihood of lower prices in the future and during the harvest season, it is reasonable that today will tend to sell apples. And, in return Apple's buyer has aim to have the same amount of apples for the production of juice in the warehouse six months later, and it is clear that he also faces a risk of price changes and price rises. Therefore, it tends to buy apples in its current history. Therefore, considering that the risk is completely opposite in two directions, the …show more content…
The benefits of this contract acheives to both sides of the contract. Both sides of the contract, as a result of conducting contract, eliminate all the risk of the price as the gardener now knows that he sells 20 tonnes of his own apple 6 months at an affordable price; whether the market price increases six months later and Whether it is reduced. The buyer also eliminates the price risk. He is also only obliged to pay the price in the contract; whether the current price increases in the next 6 months, whether it will be lowered. In this way, the parties undertake to make a deal at a specified price in the future contract , on a well-known date. The seller in the contract pledges to provide the principal asset in the contract at the maturity of the contract, and the buyer also undertakes to purchase the goods and buy the goods. But these contracts also encountered problems. Troubles such as finding one another for contracting. Or, if one of the parties to the contract could not fulfill its obligations for some reason, the sale of the contract in the secondary market was not possible to a third party. In fact, this tool lacked a secondary …show more content…
As a result of which they will be required to make a deal in the future9. Another is that: the future benefits reach to parties, because risk eliminate the price in general. Because both are sure of a future deal at a particular price. Third: Future contracts are often settled on the maturity date by trading and surrendering the payment. Fourth, the other features of these contracts are that the delivery price is agreed upon by the parties, which at the time of the contract is the same as the expected
When discussing the concept of contract law, there exist two bodies of legal rules that may apply to the contract. These bodies are the common law of contracts and Article 2 of the Uniform Commercial Code or the UCC. The common law of contracts is court made and is constantly changing, but the UCC is required in every state within the U.S.A. It is important to know which one to use and when, as well as what the differences between them are.
The four elements of a contract are the agreement, the consideration, contractual capacity, and a legal object. The oral agreement between Sam and the chain store satisfies the agreement element of a contract definition because when the chain store offered to sell Sam 's invention at their stores, Sam accepted by agreeing to ship 1000 units in exchange. The second element of a contract, the “consideration of each party,” is satisfied because Sam and the chain store have something to give the other (1000 units of the invention in exchange for the exclusive sales of the product at their stores). The third element is “contractual capacity,” which may or may not be fulfilled since we do not know Sam 's age or whether
Legal Studies Essay Joey Agerholm Exclusion clauses determine the liability of something that might go wrong within a contract. They are used by sellers as an attempt to avoid or limit their liability. The seller has the advantage over the buyer who must agree to the clauses to purchase the product/service. Because of the buyers disadvantage the court takes such cases, involving exclusion clauses, very seriously, and the content of the clauses are carefully interpreted. With the current Trade Practises Act and the Fair Trading Act the standard form of business contract is adequate and effective in protecting the buyer. The Trade Practise Act is the most effective legislation for the protection of the consumer. It implies to the following situations:- - “A promise by the seller that the buyer will become the owner” If a car dealer breaks a promise or part of a contract, for example that he has the right to sell a car, and the car is stolen then although the buyer will have to give the car back he/she will get her money back. - “ A promise by the seller that goods will fit the description supplied by the seller” In this case the buyer is protected if the seller makes a promise, which is a condition of the contract, describing the product, and when the buyer receives the product, it does not match the description. - “ A promise where the seller is made aware of the purpose for which the goods are required, that the goods will be reasonably fit for that purpose” This condition is implied when the buyer makes the purpose of the goods needed known to the seller, and the buyer then relies on the seller’s judgement in providing the correct product. For example it would not be reasonable if you made the seller aware that you wished to purchase something suitable for mowing the average suburban backyard and you were sold a tractor. - “A Promise that goods are of merchantable quality” According to this act a good is considered to be merchantable if they are suitable for the prospect for which other similar goods are sold, involving the description applied to them, the price and any other relevant information. This act does however does not protect the consumer if he/she has examined the product and missed any defects that should have been seen or if the seller made him/her aware of the defect prior to the purchase of the product.
Next, we determine the consideration of the deal. In a bilateral contract such as this, the consideration is a promise. Mr. Stevens promises to deliver his product to the store, who in turn makes a promise to
Apple Inc. headquartered in Cupertino, California was founded in 1976 by three men named Steve Jobs, Steve Wozniak, and Ronald Wayne. Apple Inc. has a strong presence worldwide; the company currently has 478 Apple retail stores in 17 different countries. The company focuses primarily on designing, developing, and selling electronics, computer software, and online services. Some of the hardware products are; iPhone, Mac laptop, the Apple watch, and the iPad tablet. Apple Inc. has become one of the most important American companies due to its innovative skills. According to a Forbes article, “The Boston Consulting Group ranks Apple as the world’s most innovative company. Apple has topped BCG’s list of 50 companies every year since 2005.”(Adams,
It is explained within these definitions commodities are often sold in future contracts by investors, which is an agreement to buy or sell a commodity in a designated future period at a price agreed upon at the commencement of the contract by the buyer and seller. Future contracts are standardised according to the quality, quantity, delivery time and location of the commodity. A future contract differs from an option, an option gives one of the parties a right and the other an obligation to buy or sell. While a future contract represents a requirement of parties, one to deliver and the other to accept delivery. A future contract is part of a class of securities called derivatives, named because securities derive their value from the worth of an underlying investment ( Farlex 2011).
OFFER: the will to sell and go in obligation bounding due to the terms and conditions mad by him and should be legal and fair to the other party.
Today, Apple keeps coming out on top with their exceptional and award winning items and administrations. Apple is additionally credited with driving the advanced media upheaval with their iPod compact music and feature players and iTunes online media store, making the first supportable music-downloading plan of action ever. (Jakab,
The goods must also be paid for by various methods of payment to facilitate international trade. This essay aims to analyse the possible claims from our advising buyer G arising from other parties to the contracts involved in this transaction. The essay will also analyse the legal relationships of all parties created that their respective rights and duties may have in the transaction. In doing so, it will discuss sale of contracts on c.i.f.
Today, futures not only include the trading of agricultural goods, but also other commodities, financial instruments, and currencies. Benefits of Futures Though hedging risk is a beneficial purpose of futures, these derivatives have a number of advantages within the investment market. Primarily, since hundreds of thousands of futures are traded daily, they are considered to have greater liquidity than forwards or stocks (Durbin, 2010). Furthermore, futures are highly leveraged investments because they require investors to post a margin, typically 10% of the contract, to be used as collateral against contract default. Futures margin, is vital in keeping financial integrity among investors of these derivatives.
The exclusion clause is an important device for allocating the risks between the contractual parties. However, the exclusion clauses could mostly be found in written contracts, especially standard form of contracts. Standard form contracts with consumers are often contained in some printed ticket, or delivery note, or receipt, or similar document. In practice, it is very common that if a person wants the product, he may have no alternative but to accept the terms drawn up by the other party even though such terms are disadvantage to him, or he may simply accept it regardless the possible unfavorable position because he does not trouble to read a long list of terms and conditions. Therefore, contracts are regularly signed, tickets are simply accepted, or a tick-box on a website is clicked, commonly between large companies and individual consumers.
Consideration in contract law, is an exchange of something of value between two or more parties in a contract. Each party in a contract must be a promisor and a promisee. A promisor creates an agreement that provides consideration to the promisee in exchange for the promisee’s agreement to provide a service. The value of consideration from the promisor must be of the same value as the performance of the contract terms by the promisee (Open University, 2016). There are two types of consideration, executed consideration and executory consideration. For example, if one party in a contract makes a promise in exchange
This judgment given set criterion which is still been used in the modern court system and due to this case it was developed that an offer of contract can be unilateral and doesn’t have to be made to a specific party only. Also it was developed to that the acceptance of an offer does not require a notification and that once the concerned party purchases the product the contract is active then and there itself. And it was also established that purchase of an item is a fine example of consideration and therefore makes it a valid contract. (Smith, 2000).
The offeror is an indication that it’s willing to enter into a contract with a certain terms once the offeree has accepted.
There are several types of contracts which impact the characteristics of the business in occasion control and providing industry(Bekiris & Doukakis, 2011). The contractor or service provider always try to fulfill the consumer to be able to improve the good will and the achievements of a company is relevant with the fulfillment of the clients. Different process should be followed to type a agreement and the agreement must be followed by the clients to make sure the achievements of any occasion.