There are different stakeholders working in an organization. Some of them are internal while others are from the external environment. No organization can survive in isolation. They need to interact with other companies and individuals to fulfill their needs and business requirements. Sometimes a company might need to buy some supplies or any other products from the other individual or company and in some instances, there might be the need to hire the services of others for some purpose that cannot be done by the employees of the company.
All these contacts and relations are made only once these are in line with the company’s rules and objectives. And this objective of almost all companies makes maximum profits. While interacting with these firms and individuals there is a dire need to undergo some sort of legal documentation or proof of working. This legal agreement is often known as a contract. There are different types of contracts used in business entities. One such contract is management contract.
What is Management Contract?
A contract is used for various fields and functions in the business entity. A management contract may refer to any agreement between two parties like a supplier and the company management. It can also be for a management company or from a service provider hired for specialized project or work. The contract will contain all the basic terms and conditions of the agreement and will be legally binding on all the parties concerned. It can also be used as hotel management contract between the parties.
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