Contracts (except for those of high paid professional athletes who believe that they do not have to be held to such trivialities) are documents that require events to take place at the behest of each participant. When the participants are buyers and sellers, a contract is normally written to specific exactly what the buyer will receive from the seller, and what the seller will receive from the buyer. The contract also spells out any terms and conditions of the purchase or sale, and what the consequences will be if the contract is not fulfilled by either party.
As one recent article reports "contracts are mediated by markets, implying that there exists a price for every possible good for each possible contingency over each possible date" (Nosal, 2010, p. 1). As Nosal puts it, people choose to buy or sell goods to maximize their own happiness, and their only constraint is that the "value of what they buy cannot exceed...
1). The idea is to cover the contingencies when the buyer or seller bites off more than they can chew. This is true whether it is an individual credit card holder or a large corporation or government entity looking to build bridges, companies or expand services. Contracts can be broken by either side and for a myriad of reasons.
What happens when the seller, or the buyer for that matter, cannot deliver on contractual promises? That's when the problems start. Problems surface when one party or the other cannot fulfill their agreements as stipulated by the contract. For instance, if an individual defaults on his or her credit card payment, the credit card company can refuse to pay for future purchases, can levy fees and higher interest rates, and can even send Luigi in to collect monies owed.
In the case of government entities or corporations, many more people are…
