Business Contracts and the Law

Contract Basics

Regardless of the type of business you own, you will be required to draft and negotiate contracts for and with your employees, vendors and customers. These contracts form a cornerstone of your business by determining how it will be run. Therefore, it is important that you seek the advice of an attorney with business-contract experience. Whether you are a first-time business owner or an established entrepreneur, consult an experienced lawyer regarding your business needs today.

Contract law can be overwhelming, as it can involve a complicated system of state and federal laws, as well as consideration of business needs and strategies. The following is a brief overview of general contract law.

What is a Contract?

At its most basic level, a contract is an agreement between two or more parties that is legally binding.

Laws that Affect Contracts

Contract law can be highly complex and may involve both state and federal laws. In addition to state and federal laws, a contract may be governed by either the common law or a set of uniform acts known as the Uniform Commercial Code (UCC).

The Common Law. Contracts that do not pertain to the sale of goods will most likely be governed by common law. The common law is historical, judge-made law that can vary greatly from state to state.

The Uniform Commercial Code (UCC). When a contract involves the sale of goods, a set of uniform acts called the Uniform Commercial Code (UCC) will usually apply in addition to the common law. Most states have adopted the UCC in whole or at least in part, making the UCC's provisions part of the state's codified laws pertaining to the sale of goods.

Creation of a Contract

With some exception, a contract arises when there is an offer, acceptance of that offer and sufficient consideration or bargained-for value to make the contract valid.

Breach of Contract

When one or more parties do not perform as agreed under a contract, the other party may sue for breach of contract. A breach can occur in a variety of instances and between any or all parties to a contract. Determining if an actual breach has occurred is often left to a court to determine. Arbitration, however, is gaining momentum as a means to resolving breach of contract disputes. Oftentimes, a contract will specify if disputes will be heard in a courtroom or via alternative means such as mediation or arbitration.

Conclusion

Contract formation, negotiation and interpretation require care, exactness and foresight. An attorney who is skilled in creating business contracts can assist you with your contract matters.

DISCLAIMER: This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.

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