In a competitive business environment, it is essential to seek legal counsel from an experienced attorney. At Worman & Sheffler, P.A., we assist business clients in a variety of areas. From business formation to drafting contracts and resolving business disputes, we are prepared to represent you during any business matter.
Business Contracts and Agreements
Contracts and agreements are vital for conducting business for all sizes of companies. A contract meets specific criteria to make it legally enforceable. A legally enforceable contract can be used in court as support in a decision on a disputed item. When something goes wrong, a written contract protects both parties. If one party in a valid contract believes the other party has broken the contract (breached), the party being harmed can bring a lawsuit against the party who it believes has breached the contract.
The legal process, or litigation, determines whether the contract has been breached or whether there are circumstances that negate the breach. The court will only hear a contract dispute if the contract is valid.
Six Required Elements for a Contract to Be Valid
The first three elements relate to the agreement (see point 1), and the other three relate to the parties making the contract.
- Offer, Acceptance, and Mutual Consent: Every contract must include a specific offer and acceptance of that specific offer. Both parties must consent of their free will. Both parties must agree to the same terms.
- Consideration: There must be something of value exchanged between the parties. The thing of value may be money or services, but both parties must give something.
- Competence: Both parties must be of “sound” mind to comprehend the seriousness of the situation and understand what is required. If one party is not competent, the contract is not valid, and the non-competent party can disavow the contract.
- Legal Purpose: The contract must be for a legal purpose. It cannot be for something illegal.
Why Business Contracts Must Be in Writing
- People forget.
- People disappear.
- People lie.
- People misunderstand.
- Some contracts must be in writing by law.
Laws included in a Statute of Frauds require certain kinds of contracts to be set out in writing and signed by the parties in the contract.
Types of Contracts that Must Be in Writing
The most common type of contracts that must be in writing are: contracts for the sale or transfer of an interest in land, and a contract that cannot be performed within one year of the making (mortgages, for example).
Other types of contracts that must be in writing are: a contract for the sale of goods valued at $550 or greater, a contract of an executor or administrator to answer for a decedent’s debt, a contract to guarantee the debt or duty of another and, a contract made in consideration of marriage – a prenuptial agreement, for example.
Most types of business contracts fit into these categories. Therefore, most contracts need to be in writing.
Exceptions to the Statute of Frauds
Some exceptions to requiring that contracts must be in writing are partial performance. If a buyer has accepted part of the property and paid for it, and if the parties can’t be returned to their pre-contract positions, a court may order specific performance. Note: In contract law, a party may recover on the basis of a promise if the party’s reliance on that promise was reasonable and caused a problem.
At Worman & Sheffler, P.A., we take pride in our ability to represent clients of all sizes and specialties – from small, individually owned or family-owned companies, to large corporations. We handle contract drafting and negotiation, litigation of contract disputes, and receivables collections. We also handle business matters from formation to dissolution, business planning to risk management, and credit analysis to procedures.
To learn more about how we get results for our clients, call for a consultation at 407-843-5353 or 888-279-3811 (toll-free). Our office is in Winter Park, Florida, and we represent clients throughout the state of Florida.