The knowledge of how to write a contract is a useful skill to have. Often when there is a transaction or agreement between two or more parties, a contract is put in place. This is so everyone knows where they stand. Both parties know exactly what the situation is if something or another occurs. You don't want there to be an altercation because there is confusion due to unforeseen circumstances. Thus when one writes a contract no matter what kind of contract it is, it is important that the contract is written with care and skill. The person who writes up the contract needs to be fair and balanced to both sides. Of course both parties have the ability to propose amendments and changes to the contract and they will be made as long as they have the consent of both parties. Even after the contract has been signed by both parties it can be changed. If people were pressured into signing a contract which is unfair to them they can claim duress and have the contract declared null and void but for the most part the legal system likes to uphold contracts because if they didn't the whole legal system would collapse. Then anyone who didn't like anything would challenge the contract they had signed.
TEN SIMPLE STEPS TO WRITE A CONTRACT 1. Same As Cash: Check box if it applies and write in the deferred payment period in months on the left side of the contract. 2. Itemization of Amount Financed: Fill-in this section to determine the exact amount being financed. Copy this amount to the Amount Financed shown in the dark box. 3. Annual Percentage Rate: Write in the APR for the program you have selected. 4. Payment Schedule: Calculate the Monthly Payment by multiplying the Amount Financed by the Payment Multiplier that matches your deal (ie. APR and Term). 5. Payment Schedule: Write in the # of Payments (not term) for your selected program. 6. Payment Schedule: Determine the Beginning Payment Date by looking at the date the Buyer signs the contract and adding the number of months to the first payment depending on their payment option. (Options: Standard and Energy Star Program use 1 month from signing; 90 day SAC use 4 months from signing; 180 day SAC use 7 months from signing; and 12 months SAC use 13 months from signing) 7. IMPORTANT: CLEAR YOUR CALCULATOR 8. Total of Payments: Multiply the Monthly Payment by the Total # of Payments, this gives you the Total of Payments. 9. Finance Charge: Now take the Total of Payments and Subtract the Amount Financed to give you the Finance Charge. 10. Total Sale Price: Write in the total Down Payment (including cash down payment, trade-in allowance, and rebates) and add to the Total of Payments, this gives you the Total Sale Price. FRIENDLY REMINDERS • Remember to complete the Description of Proposed Home Improvement. • Buyer(s) must sign and date the contract on or before the installation date. • Approximate job start date and job completion date is the date you will be able to install the equipment in the Buyer’s home. • Dealer must sign the front and back of the contact before sending to Comfort Financial for Funding. Form pmc90 (10/04) PAYMENT MULTIPLIER CHART APR Term # of Payments Payment Multipliers 16.90% Pfd 12 12 .091157 24 24 .049394 36 36 .035603 1 Month to 48 48 .028803 1st payment 60 60 .024799 90 90 .019670 APR Term # of Payments Payment Multipliers 13.90% Std 12 12 .089740 Energy Star 24 24 .047966 36 36 .034129 1 Month to 48 48 .027276 1st payment 60 60 .023216 90 90 .017950 APR Term # of Payments Payment Multipliers 19.90% - 3 Mo 12 9 .126622 No Pay/SAC 24 21 .059653 36 33 .041594 4 Months to 48 45 .033315 1st payment 60 57 .028636 90 87 .022896 APR Term # of Payments Payment Multipliers 19.90% - 6 Mo 12 6 .194776 No Pay/SAC 24 18 .071427 36 30 .046996 7 Months to 48 42 .036693 1st payment 60 54 .031097 90 84 .024443 APR Term # of Payments Payment Multipliers 19.90% - 12 Mo 12 NA NA No Pay/SAC 24 12 .112788 36 24 .061941 13 Months to 48 36 .045210 1st payment 60 48 .037005 90 78 .027951 Form pmc90 (10/04)
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