Do you have a service agreement you want to review?
Suppose you’re an entrepreneur in the early stages of building a business. In that case, you may need to enter into contracts with partners, vendors, and manufacturers to get your products and services to market.
This is where contract law comes into play. If you’re new to running a business, you may not be familiar with contract law and how it could benefit your company. Don’t worry, we’ve got you covered.
Keep reading for our must-know guide to contract law.
What Is a Contract?
A contract is a legally binding agreement between two or more people or organizations. These are typically in writing and contain all of the terms and conditions of the agreement. When you sign a contract, you agree to be bound by the terms of that contract.
This means that each party to a contract agrees to give something of value in exchange for something else of value. A contract law attorney is also based on the principle of fairness. This means that the terms of a contract must be fair to both parties.
A contract lawyer’s job is to draft and have a look at the contracts to ensure their client’s rights are safe.
The Elements of a Contract
In order for a contract to be formed, four elements must be present: offer, acceptance, consideration, and intention to create legal relations.
The offer must be clear and unambiguous, and the person making the offer must be willing and able to follow through with the proposal. Acceptance is when the person to whom the request was made agrees to the terms of the offer.
Consideration is what each contracting party receives from the agreement. In order for consideration to be present, each party must give up something of value.
The intention to create legal relations is an agreement between parties to create a legally binding contract. This intention can be expressed or implied. If there is no intention to create legal relations, there is no contract.
Types of Contracts
The four main types of contracts used in business are verbal, written, standard form, and adhesion.
Verbal contracts are the simplest and most common type of contract. They can be created with a simple offer and acceptance.
Written contracts are more formal and can be used for more complicated transactions. They are generally more enforceable due to their nature to have either party sign contracts for proof.
Standard form contracts are usually used by businesses when entering into agreements with consumers. Adhesion contracts are contracts that one party has very little bargaining power and must either accept or reject the terms of the contract.
Common Mistakes
Failing to have a clear and concise contract. This can lead to misunderstanding and confusion later on.
Another mistake is to include terms that are not legally binding. This can create problems if one party tries to enforce the contract later.
Contract Law Awareness
This guide has provided basic information to contract law. You need to remember that every contract is different and that specific legal advice should be sought in relation to any contract you are party to.
Understanding these rules and exceptions can be tricky, but luckily there are many resources available to guide you through the process. Remember, if you have any further questions about your rights, you should contact a lawyer.
Be sure to check out our website for more helpful tips.
