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What To Know About A Legally-Binding Contract

elements-of-a-contract

When it comes to business, contracts are going to be a focus, especially if you have connected with clients and other businesses. When establishing a contract, it’s important to do everything you can to reduce risk and make sure that all parties involved understand their duties and responsibilities. Whether you are just starting your business or have been running it for quite some time, having legal guidance to assist you with contracts can ensure that there are no mistakes or oversights. Understanding how to create a strong contract can help prevent common problems from arising later on. For more information on how to develop a contract that covers all of your bases, consider reaching out to a dedicated legal team near you for individualized advice. 

Initiating a Contract

A contract is initiated when one party makes an offer to another. While verbal agreements can be legally binding in some situations, it’s best to follow up with a written contract anyway. A valid contract needs to have certain elements, such as contractual capacity, legality, consideration, acceptance, mutuality, intention of legal relations, signatures from both parties, and other aspects. If a verbal agreement is made and there is no document outlining each party’s roles and obligations, it can leave too much room for misunderstandings and disputes. 

Legal Considerations

A contract cannot have violations of people’s rights and protections. Contracts that risk public welfare or infringe on public policies may have problems with enforcement. As an experienced attorney has seen, there are times when a contract cannot be carried out as intended. For instance, a contract may not be imposed if there was injury caused to a party when performing their responsibilities. Ultimately, contracts should have realistic terms that do not violate the law and aim to reduce the chances of injury or disagreements. 

Negotiation and Acceptance

Before a contract can be considered valid and signed, all parties have to negotiate until they are happy with the terms and then accept it. Some contracts may have conditional offers, which only exist if there are set conditions present. As our friends at Cohen & Cohen would agree, if the person being offered a contract has not responded, then it cannot be finalized. The receiver of the offer has to make it clear that they intend to abide by their end of the contract before it is legally completed. 

Only after a contract has been initiated and an offer accepted can a contract be deemed legally reliable. The contract terms cannot violate people’s rights or impede other laws that safeguard public safety. Because disputes or problems with contracts can arise suddenly and have the potential to affect profit and reputation, consulting with a legal team that is familiar with business law can make all the difference in the success of the contract itself. It does not matter if you are new to business or have been operating a company for decades, every business person must have a lawyer to review contracts before signatures are provided. In this way, the best interests of the company are protected.

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