What Is Contract Law?
Are you or your business venture facing a contract dispute? Do you stand to lose or gain a significant amount based on the language or interpretation of an agreement? Call now or complete the online contact form below to speak with an experienced local contract law attorney.
In business and other situations, certainty matters. Rather than relying on verbal assurances or statements, many individuals and business leaders choose to execute contracts. These often-written agreements define the rights and responsibilities of all parties. They are also legally enforceable.
Contract law accomplishes a few different objectives.
First, the tenets of contract law provide the framework for drafting legally binding agreements. If there is some dispute about the meaning of a contract, contract law helps settle it. Furthermore, contract law gives contractual parties an avenue for enforcing their agreements or taking advantage of other legal remedies.
Typically, state common law and statutes govern the drafting, execution and enforcement of contracts.
The Elements of a Valid Contract
Individuals execute contracts all the time. Whether a contract is legally enforceable, though, likely depends on whether it has these three features:
If a contract is missing any of the above, it may not pass legal muster. That is, parties named in a deficient contract may be within their rights to walk away from the agreement. Accordingly, when drafting any contract, it is essential to satisfy each element.
The offer is the first step in creating a binding contract. In contract law, an offer is the expression of willingness to enter into an agreement upon the other party’s acceptance of the offer.
If the other party accepts the offer, its terms become the basis of the contract. On the other hand, the other party may extend his or her own offer, known as a counteroffer, in response to an initial offer.
If a party accepts a counteroffer, the counteroffer’s terms create the contract.
A person may make any offer he or she wishes, but no contract exists until there is acceptance. For an individual to accept an offer, there usually must be a meeting of the minds. That is, each party to the agreement must see eye-to-eye about its terms.
In contract law, acceptance must be both unqualified and absolute. If the accepting party changes anything in the offer, there is no acceptance. Rather, the modification becomes a counteroffer that the other party can accept, reject or counter.
Finally, all binding contracts must have consideration. This is a bargained exchange of something of value between the parties.
Typically, consideration takes one of the following forms:
- A party agrees to do something he or she is not legally required to do.
- A party agrees not to do something he or she has a legal right to do.
With many contracts, money is the consideration. For example, a person buys a parcel of land for $500,000. The buyer must part with his or her money, and the seller must part with the property.
Other Contract Points
While offer, acceptance and consideration are the elements of a binding contract, there are other points any party to a contract must consider. These include subject matter legality, contractual capacity and the statute of frauds.
Subject Matter Legality
For a contract to be valid, it usually cannot violate the law or public policy. A person may sign a contract to buy apples, for example, but he or she may not sign one to purchase illegal drugs.
To execute a contract, an individual must have legal capacity. Usually, parties to contracts must be adults who are of sound mind. They also must not be under duress or undue influence.
The Statute of Frauds
The statute of frauds is a legal concept that aims to prevent fraud in business and other transactions.
While any agreement, whether verbal or written, has the potential to form a legally binding contract, certain contracts must be in writing to comply with the statute of frauds. These usually include the following:
- Marital contracts, such as pre– or postnuptial agreements
- Contracts that take longer than a year to complete
- Contracts for the sale of land
- Surety contracts
- Contracts for the sale of goods over a certain amount, which is often $500
The Process of Enforcing a Contract
Whether you have a verbal or written contract, you may need to take legal steps to enforce it. After all, the other party may not live up to his or her end of the bargain. If you have a contract dispute, you probably have a few different options for resolving it.
The Terms of the Agreement
Many contracts have provisions for resolving disputes. Accordingly, you should review your contract to see what steps you can take to enforce the agreement or otherwise address your disagreement.
You may be able to ask a court to enforce your contract or otherwise make you whole. Courts also typically have the authority to award monetary damages for breach of contract.
Alternative Dispute Resolution
If you prefer not to go to court, you may be able to resolve your contract dispute through mediation, arbitration or another type of alternative dispute resolution. With this approach, you work with a neutral third party to reach an acceptable outcome.
Work With an Experienced Local Lawyer
Contract law is incredibly complex. Nevertheless, if you enter into a valid contract, you can expect its terms to bind you. Working with an experienced local lawyer may be the right approach.
Contract attorneys can help with all phases of the contract process. When you are negotiating an agreement, a lawyer can make sure you protect your legal interests. He or she can also advise you on which terms to include or reject.
If you need to enforce the agreement, a knowledgeable contract lawyer can represent you in court or through alternative dispute resolution.
Rather than leaving your contract or its enforcement to chance, submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!