Agreement - Term Overview

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An agreement is a determination made by two or more states, individuals or companies. The final decision of an agreement is the result of a negotiation process between the different parties.

To give greater force to an agreement, it's usual for them to be formalized in writing. In this way, each and every one of the agreed conditions will be collected and detailed.

Just as there are agreements between individuals, between companies and between individuals and companies, countries also have the capacity to seal agreements. Thus, an agreement between different States is called an international treaty.

Elements of an agreement

What elements are necessary to formalize an agreement?

- Coincidence of wills. The end result must be a negotiated and agreed decision between the parties.
- The decision taken is mandatory. This means that the signing of an agreement generates obligations that must be fulfilled and rights that can be exercised.
- Consent of the parties.
- The object of the agreement must be well specified and it must be possible.
- Regarding the form, it's possible to sign agreements orally or in writing. However, depending on the type of agreement, the law may require that the agreement be recorded in writing.

Types of agreements

The types of agreement are:

- International treaty: It's a pact reached between two or more States. They can be agreements that address economic, commercial, political, technological, scientific issues, and even agreements that end a warlike conflict. They can also take place between supranational organizations or between States and international organizations. As for their form, the normal thing is that they are collected in writing. They are framed within International Law, specifically by the Vienna Convention.
- Trade Agreement: They affect trade barriers. They regulate, reduce or eliminate tariffs and quotas in favor of free trade. They are very useful for establishing more collaborative business relationships. Not only do they deal with tariffs, they also address aspects such as intellectual property, customs rights, administrative procedures for goods and the applicable legislation to resolve commercial disputes.
- Social agreement: These are the agreements reached between trade unions and employers or business organizations. They regulate working conditions and are the result of a negotiation process between workers and employers. If they aren't respected, the workers have the possibility of resorting to the strike as an instrument of pressure and protest. A key aspect is the right to collective bargaining. In other words, workers, through their union representatives, have the right to negotiate their working conditions with the company. This right to negotiation is protected by the conventions of the International Labor Organization.
- Collaboration agreements between companies: These are alliances between different companies. However, if these agreements between companies hinder free competition, they are considered illegal. In this case, two companies cooperate sharing risks and resources, detailing the duration of the agreement and the responsibilities of each company. As a consequence of this type of business alliance, a new partnership may emerge.
- Confidentiality Agreement: Two organizations agree to share certain information between them, but without giving it to the public. They are very common in commercial relations and affect aspects such as industrial property and technical knowledge.

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