Contracts are behind most business and commercial relationships. Without contracts, entering into any business relationship would be risky. A contract lays out the rights and responsibilities of each party involved and offers legal protection as well.
Contracts take many forms. They can be customized or boilerplate. They are usually in writing, but oral contracts may be enforceable as well. Contracts reflect the unique circumstances of the parties entering into a business relationship together.
But what makes a contract valid?
To be legally enforceable, a contract must generally include two things:
- All parties agreeing to the terms of the contract. The terms typically are offered by one party and accepted by the other(s); and
- An exchange of something of value (such as goods, services, cash, etc.)
However, a contract’s enforceability depends on other factors as well. For example, the law restricts some people from entering into contracts, such as minors or individuals with limited cognitive ability. Additionally, courts often refuse to enforce contracts if it finds one party was coerced into signing the contract.
Contract law is complex. Anyone entering into a contract should carefully consider their options, as the stakes can be high – financially and otherwise. It is advisable to work with an attorney to draft a contract because contracts should contain specific language to address the unique needs of the parties involved.
However, if you are entering into a business relationship where a contract has already been drafted, it is critical to have an attorney review it before signing. When a contract dispute arises, it is advisable to seek legal help as soon as possible.
Talk to an attorney: If you are interested in having an attorney help you prepare or review a contract – or if you are involved in a contract-related dispute – please contact Chenoweth Law Group, PC, at 503-446-6261.