Contract Formation, Review and Negotiation
Contract law is the body of law that governs oral and written contracts/agreements
that are associated with the exchange of goods, services, money and property.
The statutes that govern contract law have been written in the common
law and the Uniform Commercial Code "UCC." Common law governs
contractual transactions with real estate, services, insurance, intangible
assets and employment. UCC governs contractual transactions with goods
and tangible objects (such as a purchase of a boat).
A contract is a legally binding agreement entered into voluntarily by two
or more parties with the intention of creating a legal obligation, which
may have elements in writing, though can be made orally. Oral contracts
have heightened requirements based on their diminished indicia of reliability.
The following is more information on the types of contracts that The Presser
Law Firm, P.A. can assist you or your business with:
Keep reading below for more information on contracts in general.
Summary of Requirements
Meeting of the Minds: Parties to a contract must have an understanding of what the contract covers
and a desire to enter into that contract based on those terms.
- Ie: In the sale of a mustang – both the buyer and seller must know
that they are transacting to sell a car as oppose to a "mustang" horse.
Offer and Acceptance: One party must make an offer to another party. There must then be an acceptance
of the offer following proper common law/UCC guidelines. Anything short
of this will not suffice as a contract. There are many exceptions and
stipulations that dictate acceptance as well – these are based on
individual circumstances, therefore it is best to ask an Attorney if there
was a proper acceptance in your specific case.
Mutual Consideration In order to be valid, the parties to a contract must exchange something
of value. The validity of consideration is very often attacked in contract
litigation; therefore, make sure the consideration you are giving can
be interpreted as a valuation objectively – to be safe.
- Ie: In exchange for the mustang (car), a person gives 500 dollars. Each
person is getting a benefit (one person is getting a car and the other
is getting money).
Performance or Delivery: Whatever contemplated or stipulated to in a contract must be performed
- Ie: The mustang must be given to the buyer, along with the title and other
- Ie: A painter who contracts to paint a house for money must complete the
task of painting the house before he is entitled to full payment. Here,
there may be other contractual issues such as breach and partial payment
if the painter doesn't paint the whole house, but again – these
are based on specific facts in individual cases.
Writing: In some cases, contracts must be in writing to be enforceable – thus,
oral contracts won't suffice in all cases.
Good Faith and Observance of Public Policy: Contracts must be made in good faith and not against public policy. Contracts
made in bad faith or against public policy could potentially be deemed void.
Breach of contract is a legal cause of action in which a binding agreement
or bargained-for exchange is not honored by one or more of the parties
to the contract based on non-performance or interference with the other
party's performance. The breach must be major (as oppose to minor
– "partial breach") for entitlement to litigate on damages.
If a contract you are involved with was breached, you are allowed remedies
or "damages". These remedies include nominal awards, punitive
damages, equitable damages such as specific performance of the contract
(rare), and liquidated damages.
If you feel you have been wronged in a contract where the other party breached,
consult an Attorney to see what remedies you may have in the transaction.
Don't wait too long, remember there is a time limit (Statute of Limitations)
on the filing of contract claims (which varies by state).
YES, YOU CAN LOSE EVERYTHING!
You may think that your wealth is safe and that you don't need protection.
But don't delude yourself and accept reality — for every 60
minutes you spend making money, spend 60 seconds thinking about how to