Why Contracts Matter: A Look into How They Govern Every Aspect of Modern Life

8 Min Read
legal gavel and a business contract

Tamim Ahmed Farhan

Contracts are probably the most mundane things you’ll ever think about, but, at the same time, they’re probably the most important things you need to know about. As human beings, many of us have strong ambitions, such as getting hired into a good job, buying our own houses and our own cars, managing our finances properly, and having a stable life. Many of us have even deeper ambitions such as setting up and running our own businesses, buying real estate, investing in the stock market, and setting up insurance and loan schemes for our personal and professional ventures. You will notice one common denominator among them all: they revolve around the world of Contracts. 

So, what is exactly a contract from a legal purview?

You may have a myopic idea of how contracts work and exist from your experience of watching Suits on Netflix or movies like The Social Network, but a contract in actuality is basically a legally binding agreement that takes place between two or more parties. It inherently encompasses an offer being made, a form of acceptance taking place, under a certain set of terms, principles and conditions. 

Now, you may ask, why do we need to know about contracts? Well, it’s because they can play a very gargantuan role in your life.

Suppose you want to buy a house, you would obviously need to sign a contract with a real estate agent, on the basis of certain terms and conditions. In order for that transaction to be considered viable, there needs to be a valid contract in place. The very idea of that house being conferred upon you, is completely contingent on the contract. So guess what, the place that you may one day call “home” would be dictated by just a piece of paper. 

When you get hired into a job, you are eventually party to an employment contract. These contracts govern how much money you get paid, what your job description and positions are, and what benefits or privileges you are entitled to. The number of hours you put into your work is decided by that contract. That monthly bonus you need is decided by that contract. That paid vacation you crave for is also decided by that contract. 

Moreover, these contracts set a framework through which your employers can decide your existence in the business; that is, they can choose to keep you or dismiss you from your job for reasons detailed in the contract. Having an understanding of employment contracts can make your life much easier in the workplace, as you would be more aware of what employers owe you and also expect from you. 

Another example would be a loan. Loans are an essential element of the banking sector. As modern day human beings, we may need loans for multiple reasons. Want to buy a new car but you’re short on cash? Get a Vehicle Loan. Want to finance your further studies? Get an Education Loan. Want to set up a business but you cannot find capital from elsewhere? Get a Small Business Loan. At the end of it all, all loans are a form of contract, and these contracts can dictate significant parts of your life.

If you’re in Bangladesh, be sure to be well aware of the Contract Act 1872. This law will help you have a better understanding of how contracts work in Bangladesh. It will enable you to recognise how contracts are created, how the terms should be dictated, and how they can be revoked if necessary. At the same time, this legal knowledge will make you better equipped in dealing with contractual crimes. Because, let’s face it, in a country where the rate of crime is comparatively higher than many countries, human beings tend to easily fall victim to acts of forgery, misrepresentation, falsification, fraud, and even theft when dealing with contracts. So, having a better perspective on contracts and their regulations can allow you to find yourself in a better position to deal with such happenings, if they unfortunately do occur in your life.

But we cannot forget about the most important contract of our lives. Marriage. We all love to embrace the ceremonious nature of marriage, through vibrant holud celebrations, dance performances, beautifully decorated conference halls, honeymoons and, of course, the cinematic thought of being with a loving partner for the rest of our lives. But, at the end of the day, a marriage is a contract like any other contract. 

In the United States, nearly 50% of all marriages end in divorce. That clearly shows how difficult the institution of marriage can be. It is believed that from 2010 to 2019 in Dhaka alone, almost 70,000 divorces have taken place with 50 to 60 divorce applications being submitted every day. People at times fail to understand that marriage is a legal and contractual commitment. When you want to buy a house, you get bombarded with a huge number of forms where you need to show that you understand the most insignificant of details like the paint disclosures, the type of balconies and what not, but with marriage you don’t even get a pamphlet. That is why, we see a lot of people losing their entire life savings, personal properties and monetary worth due to the adversarial nature of the divorce process. We see many people living their dreams in one minute and then fall into overwhelming pits of financial despair in the next minute. And if only they had a better idea of how marriage contracts work, they would have been much more prepared to face such terrifying situations.

To sum it up, some basic knowledge on contracts can save your life. It can be the difference between being in a job that is right for you and a job that is not; a profitable piece of property and one that is falling apart; a safe and manageable loan and a risky and crippling one; and, finally, a marriage where you understand what you’re in for and a marriage that ends with you wondering how a person could lose so much so fast.  

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