Contracts are the tools used to describe and define the expectations of each party involved in a business relationship. Like a blueprint for building a house, a contract details the rights and obligations of each party in constructing their business relationship, including:
- The terms and conditions each business partner or person involved is expected to abide by.
- What each party is expected to achieve.
The more clearly these expectations are expressed in a contract, the more stable and long-lasting the relationship and the business are likely to be.
Thus, it’s important that your business contracts be as unambiguous as possible so that you can develop and maintain strong and stable relationships with your clients, customers, employees, and vendors. Hiring an attorney skilled and experienced in writing business contracts, as well as in providing critical legal counsel, can be vital to the health of your business and to accomplishing your business goals.
What Constitutes a Legally Enforceable Contract?
To be legally enforceable, a contract must be between two or more parties and consist of the following components:
- Legal purpose. There must be a “legal purpose.” For example, if person X hires person Y to perform an illegal act, such as shipping products with restricted technology to a prohibited country, and person Y fails to do so, or otherwise fails to perform their obligations under that contract, person X has no legal recourse against person Y. Contracts that obligate someone to perform illegal acts are invalid and unenforceable.
- Mutual agreement. There must be a mutual understanding of and agreement about the essential elements of a contract's subject matter (e.g., in the case of a Service Provider, the scope of work, specifications, and the desired outcome or deliverables). This "meeting of the minds" must be shared by all parties to the contract.
- Consideration. Each party involved in the contract must give up something of value in exchange for a benefit. For example, if you hire company X to landscape the property around your home for a certain price, company X is promising to provide you landscape services in exchange for your promise to pay for those services.
- Competent parties. All parties involved in the contract must be “competent.” This means each party must be of legal age, of sound mind, and not under the influence of alcohol or drugs. For example, if the contract is signed by a minor, or someone considered mentally incapable of understanding what they are signing, the contract is voidable by the minor or mentally imcompetent party.
- Genuine assent. Each party involved in the contract must freely engage in the agreement. If a party is mistaken about something essential to the contract, or if a misrepresentation of fact, or other fraudulent act by another party, has induced a party to enter into the contract, there can be no genuine assent.
How Becker Law LLC Can Help
Often, contracts are written in “legalese”—language that is dense, complicated to read, and uses legal jargon that is nearly impossible for non-lawyers to understand. However, at Becker Law LLC, we write contracts and legal documents for our clients in plain language. Clear and coherent language helps everyone identify potential misunderstandings, avoid the cost of broken business relationships, and resolve issues quickly.
Plain language documents not only save your business time and money, they put processes into place that ensure you get paid on time, your ideas and work product are protected, and the relationships with your business partners are established and maintained.
At Becker Law LLC, we provide contract, business law, and intellectual property services customized to your business. We will negotiate, draft, and review your contract documents, including asset purchase agreements, commercial leases, non-disclosure or non-competition agreements, consulting or outsourcing agreements, strategic partnership agreements, and more. Additionally, we can establish and plan new companies, including corporations, limited liability companies (LLCs), partnerships, and sole proprietorships, as well as offer advice and provide guidance on laws and regulations affecting your business. If you’re faced with a contract dispute, we can assist in helping you resolve it.
If you want to discuss your new or existing business venture and your legal rights and options, and you’d like to understand how our “frictionless customer service” can work for you, contact Becker Law LLC or use our online scheduler to arrange an on-demand consultation.