Question

In three to four sentences, describe how legal contracts provide incentives for people to exchange goods and services

Answer 1

A liability is a legal obligation that involves repaying money owed (or debt). For example, when a homeowner sells his or her house, then the homebuyer legally agrees to pay the owner a certain amount of money. This amount is known as the home's selling price. The selling price is an amount agreed upon by both the seller and the buyer. Once the contract is signed, the buyer owes this money in exchange for the house. The seller gives up the home to receive money, and the buyer gives up money to receive the home.

Step-by-step explanation:

Answer 2

Legal contracts are binding and give a sense of confidence and security that the agreements must be met. It is a binding contract that assures a person that both parties will be accountable for the exchange of goods and services. In this manner, both parties benefit because they act within the confines of said legal contract.