Regardless of what type of business you are in, it is essential to be familiar with contracts, including what makes a contract valid and what to do if a contract has been breached. Contracts are the basis for most business relationships and business transactions, and they can provide the foundation for a strong and healthy business.
Business law provides important protections to business owners and parties to a contract. A contract is essentially an agreement between parties that lays out their rights, responsibilities, and obligations to one another. Examples of contracts that govern everyday business transactions include bills of sale, purchase orders, employment agreements, and many other common business transactions that are guided by a contract that outlines the agreement between the parties.
To be enforceable, the parties to the contract must be competent to enter into the contract, which refers to age requirements and mental capacity necessary to legally enter into a contract. In addition, there must be mutual assent between the parties to what they are agreeing to.
The most basic components of a contract are an offer, acceptance and consideration. There are legal complexities associated with these requirements, so it is valuable to understand what they are and how challenges can be overcome if they become an issue. It is also best to have contracts in writing so that it is easier to determine whether the agreement is legally binding and if a breach has occurred. A contract breach occurs when one party fails to perform their obligations under the contract. When breach occurs, different remedies may be available to the non-breaching party depending on the circumstances at hand.
Everybody knows that relationships are important in business. Because contracts memorialize many of those relationships, it is equally important to understand, negotiate, draft and execute them. It is also imperative to know how to deal with issues of breach. Fortunately, skilled business law professionals stand ready to assist with these matters.