As a business owner, you likely handle a wide variety of contracts. These exist as an extension of your professional relationship with everyone from your employees to your vendors. Regardless of who they are with or what they are for, a contract is meant to protect you. They formalize an agreement between at least two parties where something of value is exchanged.
There will be scenarios where you will dictate the terms of your contract. For instance, if you, a business owner, are looking to hire an independent contractor for a specific project, you (and your attorney) draft a contract. The weight and value of the contract are dependent on its ability to protect you in court. Should the other party default on their end, you have a safety net.
There are other instances where vendors will be offering their own contracts. It is always advisable to have a business law attorney screen these for you—or draft them. It is still important to know what to look for.
The Necessities
Whether you are creating your own contract or are signing someone else’s, these elements should be in them:
- What is being offered
- A confirmation of acceptance
- A mutual understanding of the terms and agreement to them (also referred to as a meeting of the minds)
- The payment or benefit of the agreement for each party (also called “consideration”)
- The people agreeing have the legal capacity to do so and do consent
- The contract, consequences, and what people are exchanging are within the confines of the law
Things To Take Into Account
Though these elements appear straightforward, it takes a considerable amount of experience to draft a firm contract. Ambiguity can lead to disputes. For instance, when your contract has been prepared, what defines acceptance? The person offering the goods, products, or services can usually rescind the offer before it has been accepted. If it is unclear how acceptance is defined, then there is not a clear definition as to when the offeror can pull the offer off the table. Without acceptance, there is likely no valid contract in place.
When a contract is drafted correctly, it becomes a source for potential resolution. There will be no space to argue because the terms are listed in specific detail.
Fraser, Wilson, & Bryan, P.C.
Since 2004, Fraser, Wilson, & Bryan has delivered compassionate and professional legal representation. If you have further questions regarding contracts or anything related to business law, contact us to schedule your free consultation.
