Contracting

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Under contract ( Latin contrahere , "to contract, to agree", in the sense of "to enter into a business relationship "; more commonly used as a verb to contract ) is understood in law and economics to be the conclusion of a contract .

General

In the language of the students , agreeing to a duel is referred to as contracting , whereby the Latin word for "against" ( Latin contra ) played a role ("opponent in a duel"). Today the contract is also called a contract in the language of the office . He was primarily in the banking and stock exchange system ( financial contract ), in currency trading or commodity trading ( commodities derived the concept of contract system). The other contracting party is accordingly the counterparty . In accordance with Section 181 of the German Civil Code (BGB), self-contracting is generally ineffective and only permitted under certain conditions.

species

In the case of proprietary and over-the- counter transactions , the customers of the credit institutions are not entitled to have their securities orders executed at an official stock exchange price , so that in these cases brokerage through independent brokers or contracts with independent brokers is possible. The writer ( seller of an option ; English option writer ) has the obligation to deliver or accept the underlying value of the option contract ( securities , foreign exchange , precious metals ) in accordance with the buyer's instructions . In return , he receives the option price (option premium) from the buyer at the time of the contract.

If a forward exchange transaction is contracted in isolation, it is an outright forward transaction. However, if a forward exchange deal is contracted simultaneously with a currency and amount congruent cash transaction or a forward exchange transaction with a different maturity , then a swap transaction is in place. The hedging of the currency risk is based on the consideration that a decline in the exchange rate in the period between the contracting of an export in a foreign currency and the receipt of payment is a risk of default . This also applies vice versa if the exchange rate rises for the contracting of an import in a foreign currency and an outgoing payment.

Obligation to contract

In exceptional cases, the generally applicable private autonomy for contracts is overridden by a legal obligation to contract , so that legal subjects are forced to have to conclude contracts in certain situations.

Web links

Wiktionary: to contract  - explanations of meanings, word origins, synonyms, translations

Individual evidence

  1. Carl-Heinrich Kehr, Pricing with a Distributed Exchange Structure , 1997, p. 75
  2. Christoph Linkwitz, Foreign exchange options for exchange rate hedging , 1992, p. 11
  3. Thomas Zwirner, Foreign exchange risk, companies and capital market , 1989, p. 19
  4. ^ Thomas Zwirner, Foreign exchange risk, companies and capital market , 1989, p. 188