Contracts are part of doing business -- you won't be in business long if you don't get a clear idea of what it takes to make a contract valid and legally enforceable.
In order to protect yourself and your business, keep the following facts in mind:
The basic elements
Every contract has to have certain elements to survive a legal challenge:
- It has to be clear that both parties intended to enter into a legal agreement.
- The agreement cannot violate the law and still be enforceable (like an agreement to sell a kilo of drugs and split the proceeds evenly).
- One of the parties involved has to make some kind of offer -- whether to buy something, sell something or perform a service.
- The other party has to accept the offer.
- There has to be consideration -- which means that something of value changes hands, even if that value is fairly nominal in nature (such as a retainer fee).
While not all contracts have to be written down, it's definitely safest to do your business that way -- it makes it much harder to dispute the facts when they're printed in black and white above everyone's signatures.
Another important consideration
For most businesses, the most important thing to consider is how long your offer is valid or "open." If you make an offer, you may not get an automatic acceptance or refusal -- but that doesn't mean that the offer is rescinded immediately unless you put that condition on it in the first place.
How long an offer remains good is generally subject to interpretation and has a lot to do with your industry. If, for example, you've ever received an estimate for repairs to your home or car, you may have noticed that the estimate will say somewhere at the bottom that it's good for 30 days. At that point, if you don't decide to hire the contractor or mechanic, the offer expires.
Contracts are a vital part of business, and anything beyond the most basic of deals may require an attorney's help in order to make it valid. You may be wise to hire a contract attorney to help prevent litigation in the future.
Source: FIndLaw, "Write a Business Contract: Key Considerations," accessed Oct. 06, 2017