Thread: Thank you TGO for my first limo ride. [Story]

Originally Posted by Rick Scarf

Depreciation has an expiration date too, you can't just write off 2% a month or whatever forever, eventually you hit salvage value and full depreciation on the books. Also depreciation is completely different but I just wanted to make that point. You get the business side of it I think, and as mutton said as long as you are clear up front about the terms and it isn't some kind of "fine print" thing, then the contract is voluntarily entered into by both parties that agreed to those terms. The ability to contract like that is pretty much cornerstone to everything in modern business.

I'm aware that depreciation is permanent, but doesn't that same sort of idea apply here, as well? I get that you can't just write off an expense without ever expending anything (because nothing was actually purchased yet, even though money has been received), I'm just kind of surprised that those funds can't be held in lieu until the expense actually is made. This brings up the question of what happens if the certificate is never used, to which I don't really have an answer.

Using people accepting a contract doesn't really work as validation of the practice, though. I mean, it's not unheard of or impossible to include illegal clauses (based on vague laws or just straight up illegal) in a contract and in these cases it's fine not to honour those aspects of the contract.