What is a characteristic of "Term Contracts"?

Term contracts are characterized by having a defined duration during which the terms of the agreement are applicable. This means that they are structured to last over a specified period of time, allowing both parties to plan and allocate resources effectively for the duration of the contract. This feature provides clarity and stability in commercial relationships, as the expectations on both sides regarding performance and obligations are clearly laid out for that specified term.

By specifying a duration, term contracts facilitate better project management and scheduling, as they can be tailored to meet the needs of both parties involved within the agreed timeframe. Additionally, this characteristic also means that if either party needs to extend or modify the agreement, they can do so through mutually agreed amendments, rather than starting from scratch.

The other options do not accurately capture the essence of term contracts; for instance, having no fixed duration contradicts the defining feature of a term contract. Likewise, limiting term contracts to only service agreements or requiring payment in advance do not reflect the broader applicability and flexibility of term contracts in various types of commercial engagements.