Simple Contract

Simple contract examples.

Most disputes surrounding contracts involve confusion or unclear expectations rather than one or both parties attempting to be dishonest.

Scenario 1.

You walk into a shoe shop and see a pair of shoes on the shelf. Usually the price is clearly displayed. You try the shoes on and assuming you like the style and they fit you make the decision to purchase them. You know what you are getting and how much it is going to cost therefore it is a fixed price contract.

• The cost and terms of payment are very clear.
• The product provided (the shoes) are very clearly displayed.
• You also have the opportunity to shop around and purchase another pair of shoes at another shoe shop.
• Also not a significant amount of money is at stake. Usually somewhere between $50.00 to $250.00.

A very simple house and land package contract can be not unlike this. A very clearly defined product or service to be delivered for a specified amount of money.

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Scenario 2.

You put your car in for a 50,000km service. There is usually a set price for a set amount of work to be done. I.E. Change the oil, change the oil filter and air filters and spark plugs etc for the fixed price of $250.00. This is a fixed price contract.

• The cost and terms of payment are very clear.
• The product provided (the 50,000km service) is clearly defined.
• You also have the opportunity to shop around take your car elsewhere.
• Also still not a significant amount of money is at stake. $250.00.

Whilst the car is being serviced the mechanic calls you and advises you the car requires new brake pads for the cost of $200.00. This could be viewed as a variation.

A very simple house construction on the client’s land and once construction commences, there may be an additional charge for the removal of rock during the excavation.