Rate contract

A rate contract is a type of agreement between two parties where they agree on a certain price for goods or services. It's like when your mommy goes to the store and buys a bunch of apples at a set price instead of trying to bargain for each individual apple.

The rate contract usually lasts for a specific period of time, like a year, and during this time the buyer can order as many goods or services as they need from the seller at the agreed price. It's like when your mommy buys a bunch of apples at a set price for the whole year, even if the price of apples changes.

This is useful because it allows the buyer to plan ahead and budget for the goods or services they need without worrying about price fluctuations or haggling with the seller every time they need something. It's like when your mommy knows exactly how much she needs to spend on apples for the whole year, and doesn't need to worry about the price changing and spending more money.

In summary, a rate contract is an agreement between two parties where they agree on a set price for goods or services for a specific period of time. It's easier and more predictable than bargaining for individual purchases each time.