In the USA we have the freedom to make contracts. Contracts allow people to make their own legal relationships, to make deals that are fair or not fair, to exchange value, to transfer services and products. When done right, all terms of the transaction are fair exchange of value that the parties understand and consent to and freely enter into and are as they had intended. Sometime however mistakes are made. Sometimes terms and conditions are not defined or not as expected. Some times the true meaning is not clear. When fairly done, the expectations and intent of the parties work out. When they do not, lawyers get involved.
A contract is a legally enforceable agreement between two or more parties that creates an obligation to do or not do particular things. The term "party" can mean an individual person, company, or corporation. More on creation of a contract follows below.
At its most basic level, a contract is:
- An agreement
- That is legal enforceable
Contracts can be made by oral agreements, or by written documents, or by a promise and detrimenatl reliance, or a contract can be implied in fact from the actions of people. Some contracts must be written to be enforced (a lease of more than one year, or a real estate purchase).
Laws that Govern Contracts
Commom Law . The majority of contracts (i.e. employment agreements, leases, general business agreements) are controlled by the state's common law -- a tradition-based but constantly evolving set of laws that is mostly judge-made, from court decisions over the years.
The Uniform Commercial Code The common law does not control contracts that are primarily for the sale of goods. Contracts for the sale of goods are controlled by the Uniform Commercial Code (UCC), a standardized collection of guidelines that govern the law of commercial transactions. Most states have adopted the UCC in whole or in part, making the UCC's provisions part of the state's codified laws pertaining to the sale of goods.
Creation of a Contract
In the eyes of the law, a contract arises when there is an offer, acceptance of that offer, and sufficient "consideration" to make the contract valid:
- Offer allows the person or business to whom the offer is made to reasonably expect that the offering party is willing to be bound by the offer on the terms proposed. The terms of an offer must be definite and certain.
- Acceptance is a clear expression of the accepting party's agreement to the terms of the offer.
- Consideration is a legal term given to the bargained-for exchange between the parties to the contract -- something of some value passing from one party to the other. Each party to the contract will gain some benefit from the agreement, and will incur some obligation in exchange for that benefit.
Types of Contracts
The law recognizes contracts that arise in a number of different ways:
A bilateral contract is the type of agreement most people think of as a traditional contract -- a mutual exchange of promises among the parties. In a bilateral contract, each party may be considered as both making a promise, and being the beneficiary of a promise.
A unilateral contract is one in which the offer requests performance rather than a promise from the person accepting the offer. A unilateral contract is formed when the requested act is complete. A classic example of a unilateral contract is a "reward" advertisement, offering payment of money in exchange for information or the return of something of value.
An express contract is formed by explicit written or spoken language, expressing the agreement and its terms.
An implied contract is formed by behavior of the parties that clearly shows an intent to enter into an agreement, even if no obvious offer and/or acceptance were clearly expressed in words or writing.
Often a contract is not written clearly, or all of the terms are not expressed, or there may have been a mutual (both parties) mistake, or a unilateral mistake (one party made a mistake, and the other one knew of the mistake as it was being made).
Contract interpretation seeks accepted goals of any contract. Interpretation of a seeks thes goals through three practical tasks. First, identifys the terms to be interpreted. Second, determine whether the terms are ambiguous and encompass the competing interpretations of the parties. Third, if the terms are ambiguous there is a need to resolve the ambiguity The law has numerous rules of how to ineterpret the contract if it is ambiquos and if it is not ambiguops.
You will need a good legal team to assist you if the deal does not go the way you had expected and intented. when the deal was made.
Failure to Perform Under the Contract: "Breach"
When disputes arise over contracts, one party may accuse another of failing to perform under the terms of the agreement. Under the law, a party's failure to fulfill an end of the bargain under a contract is known as breaching the contract. When a breach of contract happens (or when a breach is alleged), one or both of the parties may wish to have the contract "enforced" on its terms, or may try to recover for any financial harm caused by the breach.
Contracts are usually governed and enforced by the laws in the state where the agreement was made. Depending upon the subject matter of the agreement (i.e. sale of goods, property lease), a contract may be governed by one of two types of state law. It may enforced in one or more states, such as where the parties are domiciled or where the transaction was performed or in the state that the document defines as the proper venue.:
We have years of experience writing, negotiating, interpreting, and enforcing contracts for our clients. We are mindfulf of the cost of lawsuits and will strive to help our clients find reasonable efficient resolutions of contract disputes. But if needed we are experienced attorneys who can and are successful in court and at arbitration