Elements Of A Strong Business Contract
At the heart of many business interactions is a contract. If you are closing a deal, reaching an agreement, or making plans for an exchange of goods or work, then a contract is what solidifies every party’s duties and rights. Contracts can also protect your business from claims related to work accidents as our own work accident lawyers can attest. While contracts can vary in terms, complexity, and duration, every contract must have an offer, defined responsibilities, and legal considerations. As a business contract lawyer offers, without a strong written contract, it may be difficult to enforce the agreement if something goes awry.
Every contract begins with the want for something, and the responsibility of someone else to fulfill that. Referred to as an offer, the first element outlines the duties of each party, and demonstrates the exchange of value, whether that be money, action, or outcome. An offer does not exist unless it is accepted by the other party, who can return with a counter-offer until an ultimate agreement is reached.
In order for a contract to be legally binding, all the parties have to know that they are entering an agreement, and willing to sign the contract as it exists. But before having every party provide a signature, it is advised that a lawyer takes a look at the contract first. This can go a long way in warding against disagreements. Since a lawyer is a legal professional with a keen eye on business contracts, similar to the team at the Law Group of Iowa, they can make suggestions on how to strengthen the contract.
Business contracts are subject to laws based on federal and state law, in addition to the rules for their jurisdiction. A contract for an illegal product or activity is not enforceable by law. If an agreement infringes on local laws, it doesn’t matter if the parties lacked awareness, since any contract that entails crime is not valid. The contract must follow the laws for the jurisdiction where it gets signed. When federal and state laws are not aligned, adding a contract clause can be useful. If any of the following elements apply to the business contract, then it is deemed no longer legal:
- The terms violate or jeopardize public policy or welfare
- An error has a material effect on the duties initially agreed upon
- The result of a contract causes oppressive obligations
- There is duress, undue influence, or misrepresentation
- A party signed the contract out of false statements, coercion, or threats
- A factor that is beyond the control of any party makes it impossible to meet the agreements within the contract
Contracts are influential business tools that can offer clarity and peace of mind that everyone understands their duties and rights. Verbal agreements may be preferred at times, and tend to be more casual. But following up with a written contract is always advised, especially if you consider the fact that a contract benefits and protects all parties involved. If you keep this information in mind and speak with a legal team before developing or signing any kind of contract, then you are more likely to have a contract result you are pleased with.