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last updated: 18th September 2012

A contract may be defined as a bargain between two or more persons whereby one or more of them undertake to do (or refrain from doing) some act in return for the other parties themselves promising to do (or refraining from doing) some act. A promise is not a contract but in Scotland may still be binding in law.

Although generally the law does not require simple contracts to be written (the exceptions include sales of land and leases over 3 years duration) all contracts negotiated within the sector should be in writing. This is to ensure that the

  • Requirements of the institution are clear
     
  • Duties and obligations of both the institution and the supplier are clear
     
  • Terms of the contract are clear
     

This need applies to both the original contract and any subsequent amendments made to it.

Contracts can be legally created and amended by word of mouth or by conduct.  Care should be taken in all activities with suppliers or prospective suppliers, so that your work or actions do not change the contract unintentionally.

Therefore, when seeking information for use in, say, a grant application it is important to ensure that you do not give any indication that you are promising, or undertaking to purchase the product from the supplier providing the indicative prices.

Where agreement is reached over the telephone, for example, this should be recorded by a confirmatory instruction giving the other party the opportunity to agree or dispute the record, thereby clarifying the precise terms of the contract. 

For example, after obtaining prices by telephone or face to face, record these on the purchase order to XYZ Ltd and mark it accordingly ie prices agreed between Mr X, XYZ Ltd and Ms A, 29 February 2012.

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