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A Contract of Sale, also known as a Bill of Sale, is a legal contract that deals with an exchange of goods, services or property from seller to the buyer for a value that they have agreed upon. This agreed value in money, or equivalent barter-able object, is either paid at the time of the transaction or at a later date agreed upon by the two parties, namely vendor and purchaser. Just like a contract that is signed between an employer and an employee, it is a legally binding document that, if broken in any way by either side, can result in court action. However, many of these Contracts of Sale carry clauses that are in place in case of possible eventualities, all in an effort to avoid legal action.
For example, Jeff’s Groceries normally purchases fresh produce from Also Veggies. They have signed a contract of sale that effectively lays out how sales and payments take place between them. So all their business transactions with each other will be based on the Contract (or Bill) of Sale.
A Trade Deficit occurs when a country imports goods valued at more than goods that they are exporting. This is not good for a country as they are in fact spending more than they are earning. What will happen eventually is that they will have to borrow money on the world market to take care of the business of running the country, putting it in debt. As the debt accumulates, the country will be pressured to take drastic measures to try and repay the debt and more than likely borrow more money from one place to pay another, resulting in a vicious cycle.
To give an example of a Trade Deficit, a country may import goods valued at $200 million and export goods valued at $10 million dollars. The trade deficit would then be $190 million.
A Trade Barrier is a condition that is imposed by a government to limit the free exchange of goods internationally. Another term that can be used for it is Trade Sanctions. There are differing reasons why any government would impose trade barriers upon a country. We can think of the one that exists now between the United States and Cuba. The trade barrier is in place because of Cuba’s communist government. This means that Cuba is unable to freely exchange goods with the U.S. and any other territory that it controls. This of course affects Cuba’s economy and is aimed at breaking communist rule in that country.
Trade Barriers are also imposed on countries internationally for these other reasons:
1. Civil war in the country that is hurting international trade
2. A style of government that is not accepted by its trading partners
3. Illegal activities on the world market that continue unchecked
4. The presence of certain diseases in a country that could affect the population or economy of its trading partners
5. Where agriculture is concerned, the presence of pests and other conditions that could affect the agricultural industry of a trading partner nation
