Contract Bridge Rules and Types
Whenever you read about bridge you may get confused and wonder what is contract bridge? Many people get confused between this and a stock. Let’s clarify the difference between the two by looking at contract bridge.
A Contract Bridge is a contract that is set up to make the individual buying the bridge sell it. The seller does not own the contract, rather it is owned by the person selling the bridge. Typically, the seller does not pay anything for a bridge. It is simply an offer of what they are selling.
Generally speaking, when it comes to a contract bridge you are legally obligated to hold the bridge until the buyer does so. Of course, the buyer has rights to the bridge, so not all bridges are sold this way. If you purchase a bridge that was sold as a contract bridge, the buyer holds title to the bridge. However, if the bridge was purchased without the buyer’s knowledge, the bridge is not considered a contract bridge. It is considered a “purchase contract.”
It is not uncommon for individuals to not read the contract completely before signing the contract. They often get tired and accept what the broker or the bridge company tells them to. If the seller knew about a defect in the construction of the bridge, they could have sold the bridge to the buyer after fixing the defects. They would then have a legal right to hold title to the bridge.
It is also very common for people to purchase a bridge as a means of investing in the stock market. Often times, brokers will sell a bridge contract on a margin account and require that the buyer makes a 10% deposit. With these types of accounts, the individual making the deposit puts up his own money and it is there solely as collateral for the broker.
There are many misconceptions about the bridge market. The reason that the people get confused is because there are many different styles of contracts out there. People are often unfamiliar with the differences between a purchase contract and a lease contract.
The purchase contract is a contract that has one main rule. You cannot actually own the bridge until the day that you pay the agreed upon amount. This means that if the broker runs off with the bridge, the person that originally purchased it still owns it.
The good news is that contracts can be compared to stock on the stock exchange. Like stocks, there are many different contracts. Once you become familiar with the rules of each contract, you will be able to see which ones can be taken advantage of.