With any company, whether a start-up or an established firm, contracts are a major part of the business. A business owner will sign a variety of contracts with a wide variety of entities. A business law attorney can help you draft the appropriate contacts to serve your company and business needs.
Legally Binding Contracts
A contract is essentially a written or spoken agreement between two or more entities that establishes a legal responsibility for both parties to perform specific duties outlined in the contract agreement. A legally binding agreement is enforceable through federal or state laws. For a contract agreement to be legally binding according to contract law, the contract must contain the following elements:
- Mutual Assent: Each person in the contract must possess a shared comprehension relating to the content in the contact. In other words, both parties should understand the terminology and meanings of all words and phrases mentioned in the contract.
- Offer and Acceptance: There must be an offer and acceptance of the contract. One person must say they intend to be bound to a contract, while the other person says they will accept the offer.
- Consideration: Both individuals in the agreement must agree to exchange a possession of value to make the agreement binding. However, in some cases, a contract can be a one-sided exchange by which only one individual gives consideration. It is always best to have your business law attorney review any contract you are thinking about signing to protect yourself and your rights.
Non-Legally Binding Contracts
A contract that fails to show mutual assent, offer and acceptance, or consideration may be deemed not legally binding. Other elements that make contracts illegal or non-binding may include:
- Contracts made under deceit, coercion, or threat
- Contracts that are not fully understood or explained to all parties
- Contracts involving illegal activities or crimes
Non-binding contracts are not enforceable in a court of law. If both parties desire the contract to be rewritten, the contract may be rephrased to satisfy both individuals. However, if an agreement cannot be made, the court may decide to award damages to the party who experienced a loss.
Contracts and Breaches
A breached contract is one that one or both parties failed to uphold. A breached contract may include the following elements:
- Non-performance of obligations
- Breach of implied duty
- Anticipatory breach
- Impossible to uphold
Proving a Contract Agreement is Fraudulent
To prove that a contract is fraudulent, one must show that a misrepresentation of material facts took place, that the misrepresentation was done intentionally with a motive to defraud, and caused injury to the other individual or party involved in the contract.
Seek Legal Help in Contract Matters
If you are entering into a contract with another business or involved in a breach of contract, you need to contact a reliable business law attorney who will examine the statements of the contract to ensure that your rights are not violated. Your business law attorney can help you create a contract agreement and develop defenses in the event a breach of contract happens down the road. Contracts are used mightily in business, and you need to make sure everyone involved upholds his or her legal obligations.