A contract is any agreement between two or more people. This can be something
as common as a vehicle purchase to more complicated matters such as insurance
or business purchase agreements.
In order for a contract to exist, there must be an offer, acceptance, and
consideration. An offer can be as simple as: I would like to buy your
car for $5,000.00. When the other person says or signals I accept, the
first two steps of the contract are complete. The final step (consideration)
is what each party must give up as part of the agreement. In this case,
the purchaser gives up $5,000.00 and the seller gives up the car. Consideration
can be a tangible item like money or property, or consideration can be
a promise to do or pay something in the future. Because the law requires
that a contract must have consideration to be enforceable, courts will
not enforce completely one-sided agreements.
Many people are not aware the contracts can be verbal (oral) or written.
Because verbal (oral) agreements are more subject to dispute and disagreement
than written agreements, a doctrine known as the Statute of Frauds protects
both parties by requiring certain contracts to be in writing. For example,
if a contract deals with the purchase or sale of real estate, or the terms
of the agreement cannot be performed within one year, the Statute of Frauds
requires that the agreement must be in writing in order to be enforceable.
If you are entering into a verbal agreement with another party, you must
make sure that your agreement is not subject to the Statute of Frauds.
If it is and you don't have a written agreement, the contract will
not be enforceable.
For every agreement, there are many ways in which the agreement can be
compromised or threatened. If you have a contract dispute, one of the
methods to resolve the dispute is litigation (a lawsuit). However, depending
on how the contract was written, there may be other options as well which
may include arbitration and/or mediation.
Too many times businesses will write their own contract. This may work
for years before there is ever a problem. However, once a problem arises,
the situation is typically much more difficult. At Owens and Perkins we
strongly encourage each of our business clients to have their contracts
reviewed by an Attorney. These contracts are the foundation and key to
the success of your business. Learning about the defects in your company's
contracts after a dispute arises is really too late.
If you are interested in contacting Owens and Perkins about drafting, reviewing
or revising a contract or obtaining representation to resolve a Contract Dispute,