Law Basics of Contract Law
Contract law governs the agreements that make up the backbone of society. Technically, contracts are agreements whereby one party agrees to provide something of value to another party in exchange for something else of value. Most contracts require consideration from both parties (i.e., a benefit received or the potential for a future benefit) and a meeting of the minds. A contract may be implied, verbal, or written but must contain each of the essential elements in order to be enforceable.
The parties’ mutual agreement on the terms of the proposed deal is one of the main components of an enforceable contract. An offeror makes an offer to the offeree which is communicated through conduct or words. Then, the offeree accepts the terms of the agreement, either through conduct or explicitly.
In terms of contract law, something is being offered when there is a manifestation of intent to enter into a bargain. To the person to whom it is communicated, the terms of the proposed deal are reasonably certain (e.g., quantity, departure and destination, time of performance , and price). In other words, the terms are definite enough to allow a court to ascertain breach or determine and award an appropriate remedy in the event one party fails to live up to the agreement.
If an offer is not communicated to the offeree, it cannot be accepted and therefore no contract arises. The offeree’s communication to the offeror on a particular deal does not act as a counteroffer if there is a definite acceptance of new terms which are responsive to the initial offer. Instead, an acceptance becomes a counteroffer if there is a definite expression of acceptance which is inconsistent with earlier terms of the initial offer. In that case, there is no valid agreement until the first party accepts the second agreement.
The offeree’s acceptance must be unconditional. An acceptance is conditional if it comes with a caveat or a further qualification. For example, "I like your car, but I’ll only take it if you throw in the oil change." If a communication includes such caveats, it is instead a counteroffer and does not form a valid contract.
Contracts and the Role of Attorneys
Attorneys play a crucial role in ensuring the successful navigation of contract law. Their expertise is essential for the effective drafting, reviewing, negotiating, and, in some cases, litigation of contracts. Most importantly, their guidance helps strengthen a client’s position and add security to their verbal and written agreements with other parties.
When attorneys are called upon to draft contracts, their primary focus is to create a document that encompasses both the substantive and procedural aspects of the transaction while also protecting the client’s interests. In addition to defining the business arrangement, the drafting attorney is also responsible for ensuring the contract complies with all statutory requirements and includes enforceable provisions. The attorney will generally consult with the client to ensure all important details are captured in the final version of the agreement.
Attorneys also play an important role in the review and negotiation of contracts. This may be the attorney’s primary responsibility if the other party to the contract is sophisticated or represented by counsel; however, an attorney should always review contracts to ensure the client’s interests are protected. An experienced attorney has the ability to identify and advise clients about problematic terms or provisions, such as those that could expose them to liability or financial harm. If disputes arise amongst multiple parties over contract terms, the attorney may assist in negotiating amicable solutions that will be satisfactory to all involved.
A seasoned attorney can also anticipate complications that may arise in either the future performance or interpretation of the contract. Properly drafted and vetted contracts will include information about proper jurisdictions and venues for any disputes that may arise between the parties. An attorney should also be consulted about the governing law to apply to the contract and its provisions. Attorneys who are knowledgeable about the law within their respective jurisdiction are invaluable in informing clients about the enforceability of their rights and obligations under verbal and written agreements.
An important consideration in the drafting and negotiation stages of contracts is the need for clear and unambiguous terms agreed upon by each party. Despite the apparent clarity of contract provisions, disagreements between parties are commonly based on differing points of view related to contract interpretation. Experienced attorneys will be able to identify the ambiguities in the terms and advise their clients on those provisions.
Common Contract Law Disputes and How They are Solved
Some of the most common contract disputes are those involving breach of contract. Understandably, both of the parties to an agreement may seek to get out of an obligation that is required by a contract, but it takes the form of real misconduct for us to call that conduct breach of contract. In other words, it must not be just an innocent mistake or misunderstanding. However, if one of the parties to a contract has outright lied to the other party, that can also be considered a type of breaching the contract.
When a breach of contract is alleged, a lawyer may be needed to help with resolution. For example, if the breach was inadvertent, you may just be able to pick up the phone and talk to the other party about accounting for the matter. It’s best to have a lawyer to do that so you don’t end up further aggravating the situation. When the breach of contract is more serious and is something that the party intentionally did in order to hurt the other side, then a claim for compensatory damages should probably be made.
A lawyer is also extremely important if the other side to a contract is refusing to acknowledge any liability on their part. When you become aware that your lawyer has some negotiating leverage on your behalf, sometimes it’s a good idea to make the threat of legal action. Your attorney is usually the one to make that threat, as well.
Key Points to Have in a Contract
It is often more important to look at the individual terms of a contract and think about them from your perspective than to keep an eye on what is acceptable in a particular type of contract. You might call these essential clauses in a contract.
Confidentiality
A confidentiality clause typically states that any information that you share with your client is confidential and that it cannot be shared by the client without your permission. Such a clause may also specifically define confidential information or provide examples of the types of information considered confidential. A confidentiality clause is particularly important if you are sharing sensitive personal information or information about another party.
Dispute Resolution
A dispute resolution clause may require you and the other party to submit to arbitration before filing a lawsuit if a dispute arises over the contract. Arbitration can be a less expensive and shorter dispute resolution process that keeps the issues private, unlike a typical court case that is subject to public access laws.
Termination
Many contracts have a termination clause that specifies the notice required for a party to terminate the contract. Such a termination clause enables a party to terminate the contract on specified days rather than wait out an entire term of the contract. As an example, if a contract has a term of one year and no termination clause , your client cannot take steps to end the contract until the one-year period has expired.
Early Termination
Sometimes, contracts provide the option for early termination of a contract. However, such a provision may require the payment of a termination fee. If the contract has a right to early termination but not a termination fee, you can ask to have any right to early termination removed if the provision is not necessary to your client (for example, if your client does not intend to terminate the contract early).
Limiting Liability
Some contracts may include provisions that limit the liability or legal exposure of the parties for one reason or another. A contract that limits the client’s liability should include specific amounts that cap the client’s total liability under the contract. Where possible, it is a good practice to ask to have the cap on your client’s total liability increased above the amount of the contract fee.
Indemnification
An indemnification clause can require the other party to indemnify or defend you against claims made against you. Indemnification clauses can include an agreement to pay for the defense of lawsuits, the payment of medical expenses or other types of remedies. Indemnification clauses are also used to shift liability caused by the other party away from you and onto the other party for certain claims.
Contract Law and Its Significance for Enterprises
An absolutely essential part of any successful business venture is a thorough attorney contract, which allows businesses to function smoothly and according to the law. Contract law is a vital aspect of how businesses operate on a public and private level, and will dictate how corporate entities or individuals respond to certain situations. Well-written contracts that are enforced fairly protect everyone involved in the agreement, and will act as a deterrent to any problem from arising in the first place.
A properly constructed and implemented contract will mitigate as much risk as possible and protect valuable intellectual property, while ensuring that everyone involved has equal rights. The language used in a contract also goes a long way to defining what actions can be taken if the contract is breached. A good contract will address all parties fairly, ensuring everyone knows what they can or cannot do so that they have no excuse for ignoring the document later on.
How to Find the Right Contract Law Attorney
Choosing a contract law attorney requires careful consideration. An attorney competent in this field will already have experience within this important area of law and will have developed a style that is personalized to what you require. When selecting an attorney, you must consider the factors that are most important for the success of your specific matter. For example, is your attorney equipped to draft contracts? Have they worked in the field of contract breach and negotiation? Do they charge a rate that is reasonable for your financial situation? Consider these questions when narrowing down your selection of attorneys. While education and experience are important factors when choosing your contract law attorney, it is equally important to consider their personal style and preferred method of handling matters. Some lawyers prefer to personally represent each of their clients, while others delegate tasks to junior attorneys . Some lawyers favor litigation as a means of combating breach of contract, while others prefer mediation and compromise. Your personal preferences as to how you wish to go about solving your contract issue are considerably significant in determining your choice of attorney. It is likewise important to consider the qualifications of each attorney you are seeking to hire. You should only hire a contract law attorney who has passed the bar exam for your state and is currently operating in good standing under state jurisdiction. Furthermore, you should consult with the state bar association to determine whether or not any complaints have been lodged against the potential attorney. The health and safety of your business or personal assets depends on hiring a qualified and trustworthy attorney, so do not make this decision lightly.