Contracts are an unavoidable part of doing business. When they’re at their best, they protect you and your partners and help your affairs run smoothly by clearly delineating responsibilities for all parties.
When they go wrong, they can become an expensive legal nightmare.
Our contract negotiation lawyers keep your contracts from going wrong by engaging in a top-notch review and drafting process right from the very beginning. We help you manage your contracts and ensure that they truly cover your unique situation. We also help you avoid bad contracts, and negotiate better ones.
Here are a few things you should know about commercial contracts.
What are the types of contract?
There are four types of contract, and several of them can “sneak up” on you and your business if you’re not careful.
The first is an “express” contract. These are common. For example, you might tell a vendor that you want to buy a service, like web design, and they tell you how much it costs. You tell them to go ahead and make the website. They do so, and when they’re done, you’re obligated to pay them what they asked for.
You can create an “implied” version of an express contract by taking something you’d normally pay for. For example, when you order food at a restaurant you’re implying you’re going to pay for that food at the end of a meal.
The next type is a “unilateral” contract. This is a contract that only creates a responsibility for one person. These are much rarer in the business world.
Finally, there are bilateral agreements: mutual agreements where two parties sit down together and make an agreement to perform certain actions that benefit both parties. Many of these contracts are routine, such as employment contracts or leases. Others require intensive negotiations between parties that can take weeks.
What are the elements of a valid contract?
The elements of a valid contract are:
- Offer and Acceptance
One party offers the contract, and the other accepts it. At that point, parties both receive some manner of benefit, or consideration, from participating in the contract. Intention means that everyone involved with the contract means to create one and that they mean for it to be legally binding. Legality means that no laws were broken while creating the contract, and that the contract didn’t come about as a result of fraud or coercion. Finally, all parties must have the legal ability to sign the contract.
While this seems straightforward, actual contracts are anything but. People get themselves into trouble and sign bad contracts all the time.
Why Merchant Law
It takes a tough negotiator and a savvy business lawyer to keep companies out of trouble when they sign contracts. Problems can arise at any point in the process. When there are too many problems with a contract, one or both parties will be unable to meet their obligations and expensive litigation will be the likely result.
Our contract lawyers have decades of experience. Call (403) 237-7777 to schedule an appointment with your new business lawyer.