To transition, the parties should review the existing agreement and identify elements that need to be included or modified in the contract. This can occur when they want to formalize the arrangement, clarify expectations, or secure their interests. Sometimes, parties may decide to transition from an agreement to a contract in procurement. However, if conditions are volatile and uncertain, a contract may be more suitable for protecting the parties from any risks that occur. Lastly, industry and market conditions should be taken into account if they are stable and predictable, an agreement can better accommodate changes that arise. Conversely, if they have a weak or new relationship, a contract can help build accountability between them. Additionally, the relationship and reputation of the parties should be considered if they have an established relationship based on trust, an agreement may enhance their bond. On the other hand, if the transaction is small-scale or involves a general outcome, an agreement may be preferable due to its flexibility and simplicity. For instance, if the transaction involves a large amount of money, a long duration, or a high level of risk, a contract may be more appropriate due to its certainty and security. ![]() The nature and complexity of the transaction can dictate which is more suitable. When deciding between a contract and an agreement in procurement, several factors must be taken into consideration.
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