Contract Formation and Review

Business Transactions, Contract Formation, Review & 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 opposed 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 or delivered.
    • Ie: The mustang must be given to the buyer, along with the title and other requisite papers.
    • 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 opposed 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 protect it!