Does anyone have any information about how to incorporate a gold clause into a current contract? Is this even possible with "legal tender laws"? Would it be possible to just peg your prices to the rise and fall of gold via dollars? Does anyone see this as a relevent way to proceed in the current economic conditions?
Ok, I'll stop with the questions and let some awnsers come forth.
Thanks everyone
I am assuming what you mean by this is that you're interested in contracting a future payment owed to yourself to be repayed in gold.
Your hunch is correct. Take a look at your dollar (I'm assuming you live in the US). Notice where it says in tiny letters: "this note is legal tender for all debts, public and private".
What that essentially means is you would have no way of enforcing a gold clause in a contract. If the other party decided to pay you with legal tender instead of gold, you would essentially have no recourse.
bigbryan98: Would it be possible to just peg your prices to the rise and fall of gold via dollars?
"Your" prices? Of what? What are you talking about?
Does anyone see this as a relevent way to proceed in the current economic conditions?
Not feasible. The closest/best way to approach something like what you're talking about is just buy gold and silver right now.
P.S.
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I think (speculating here because I am not an expert) that the legal treatment of this kind of contract would essentially be a gold futures contract. "I hereby purchase X ounces of gold from so-and-so to be delivered on such-and-such date in payment for which $Y is being paid on today's date."
Clayton -
Clayton:I think (speculating here because I am not an expert) that the legal treatment of this kind of contract would essentially be a gold futures contract. "I hereby purchase X ounces of gold from so-and-so to be delivered on such-and-such date in payment for which $Y is being paid on today's date."
Something tells me if he were looking for information on how to write a contract to purchase gold, he would be asking about how to write a contract to purchase gold...not "how to incorporate a gold clause into a current contract".
It sounds to me like he has goods and services he is contracted to deliver, and he is looking to get paid for them in gold. And as far as I know, there is no way to make that legally enforcable in the United States. If there was, the "legal tender laws" would essentially be null.
Easy fix - "my salary shall be that amount which is enough to purchase X ounces of gold"
Is that legal?
I am seeking to write a similar clause into a real estate contract, such as:
"Principle repayment to be made in currency sufficient to purchase a quantity of gold on repayment date, equal to the amount of gold that could have been purchased on the origination date."
This is of interest to me because of the long duration of the contract and the uncertainty of currency over that time. I will probably write in as well that this clause will only be triggered at an exceptional inflation rate of perhaps 6-8% threshold.
Isn't one of the risks here of usury charges because of the devaluation of the dollar and the implied 'interest rate' of repayment?