A basis of contract clause is a legal term that refers to a clause in a contract that makes it legally binding, even if it is not signed by all parties involved. This clause is typically found at the beginning of a contract, and it specifies that the agreement will become a binding contract once one party has performed the actions outlined in the contract.
There are a number of reasons why a basis of contract clause might be included in a contract. For example, it can help protect both parties in case of a dispute. If one party fails to perform its obligations, the other party can still hold the contract binding, and take legal action to enforce the terms of the agreement. This can provide peace of mind for both parties, and help ensure that the agreement is upheld.
Another reason why a basis of contract clause might be included in a contract is to help avoid misunderstandings or confusion. By including this clause, both parties are clear about the fact that the agreement is legally binding, and there can be no ambiguity about what is expected of each party.
To ensure the validity of a basis of contract clause, it must meet certain legal requirements. For example, it must be clear and unambiguous, and the parties must agree to the terms of the clause. Additionally, the clause must be included in a written agreement that is signed by at least one party.
In conclusion, a basis of contract clause is a valuable tool for ensuring that a contract is legally binding. It can help protect both parties in case of a dispute and prevent misunderstandings or confusion. If you are entering into a contractual agreement, it is important to understand the role of a basis of contract clause and to ensure that it meets all legal requirements.