Contracts Get Abrogated – It’s a Business Risk

Steve Waldman says Contracts are not bilateral

The only bilateral contract is a gentleman’s agreement. Binding contracts involve an implicit third party, the state which (through its courts system) stands ready to enforce the terms of private arrangements.

It is imperative to remember that businesses have risks which cannot be diversified away. One such risk is that your contracts are not inviolate. Courts have, in the past changed contractual terms as well as provided relief under torts for various reasons.

You cannot simply wave a contract and hope that it settles matters. A degree of trust is vital in greasing the wheels of commerce and without underlying trust no contract is worth the paper it is printed on.


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