Contra deal

From CEOpedia | Management online

Contra deal is agreement on the basis of barter cooperation. The contract consists in the exchange of goods between the entities, goods or services. It is a non-cash pact. Contra deal is used by entities with no cash. People exchanging goods or services strive to make them comparable in price. It is important that the transaction bilnas be zero [1].

Structure of a Contra Deal Agreement

Fig.1. The structure of a contra deal

The contract versus should contain specific elements. An example template is presented below:

  • Identity

The contract should be the consumption for two parties to the transaction. Data and exchange details should be saved on. The record gives guarantees with whom. There are interests and under what conditions.

Product description of the service and product offered. Remember about serial numbers of data. The contract versus the contract is a sales contract, which is why it is important to describe the good in detail.

  • Offer value

The offer can be made according to the market rate - a reasonable price. A contra deal is registered as a cyclical transaction in your bookkeeping. If the exchanges will be different from each other, how will it work.

  • Desired barter agreement

In this passage, provide a detailed description of the service or product that you will receive in exchange for your offer. It is to confirm your request. From now on, the description of this good or service has been received. This is a valuable safeguard against fraud or other value of the good received.

  • Timeline

The schedule should be included in the contract. It is important to specify when it will happen and put it in writing. Saved ten times to arrange details in the schedule and time to be agreed. The schedule helps when planning deliveries and keeping contract terms.

The contractor is a great customer for a company that is not a money company. It is important to draw up a contract. If you have any problems, get legal help [2].

Disadvantages contra deal

Due to the fact that the contra deal is a cashless exchange there are many problems and contradictions connected with it. The exchange of goods and services from both parties to the contract should be equivalent. Nowadays people have a different feeling of the value of specific dates and services. Convergence depends on different perceptions of different communities. That is why it is important to prepare and sign the contra deal. It is a security and a guarantee on what items or goods an exchange is being made. Copies of the contract should be signed by both parties to the contract [3].

Examples of Contra deal

  • A farmer barters agricultural produce for a service from a mechanic.
  • A grocery store owner exchanges food items for plumbing services from a plumber.
  • A restaurant owner exchanges a meal for a haircut from a hairdresser.
  • A furniture maker trades a couch for painting services from a painter.
  • An electrician trades electrical repairs for a gym membership from a fitness center.
  • A carpenter trades woodwork for a massage from a massage therapist.
  • A clothing store exchanges clothes for web design services from a web designer.

Other approaches related to Contra deal

Contra deal is an exchange between two entities of goods or services without using cash. There are also other approaches related to Contra deal. These include:

  • Reciprocal trading, which is a type of barter trade where two parties exchange goods or services without involving currency. This can be done for a number of reasons such as to reduce costs or to increase efficiency.
  • Countertrade, which is a form of trading where goods are exchanged for other goods. This is often used to facilitate international trade by eliminating the need for foreign currency.
  • Barter, which is a type of direct exchange of goods or services that takes place without any money changing hands.

In summary, Contra deal is an agreement between two entities of goods or services without cash. Other approaches related to Contra deal include reciprocal trading, countertrade, and barter. All of these approaches provide a way for entities to trade goods or services without the use of cash.

Footnotes

  1. ↑ Sheets. J, (2010), To contra or not to contra: Trade-outs sometime work.,Grassroots Editor , p5-6. 2p.
  2. ↑ Bruner. R, (2005) Deals From Hell : M&A Lessons That Rise Above the Ashes, Hoboken, N.J, p.26
  3. ↑ Alcantara. C, (2013)Negotiating the Deal : Comprehensive Land Claims Agreements in Canada p.13


Contra deal — recommended articles
Debit Note — Standing offer — Barter agreement — Purchase specification — Trade counter — Revolving letter of credit — Shipping guarantee — Acknowledgement of receipt — Collecting bank

References

Author: Klaudia Rodak

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