The not-so-secret “secret” to running a good business is entering into strong contracts with suppliers, employees, and even some customers. When clearly written contracts drive your business, you remove one of the potential hazards of running it and increase the likelihood of its success. Contracts, however, are only as good as their terms; an invalid contract provides no protection and may even endanger your business. By understanding the elements of a valid contract, like the initial offer and the acceptance of that offer, you stand to better protect your business and help it grow.
Offer and Acceptance
The first element of any valid contract is an offer. These are often informal; for example, you may be sitting around chatting with a business acquaintance, lamenting the state of your accounting software, only for them to propose an upgrade to that software in exchange for $3,000. Though simple, that is indeed an offer. However, as any contract lawyer would tell you, that alone does not make a contract, as the offer must also be accepted. If you shrug your colleague off and say that you’ll survive with your current software, you have chosen not to accept the offer, and a contract has not been formed.
Consideration
While an offer can be simple, there are still restrictions in place as to what counts as an offer. Imagine the same scenario above, except your acquaintance now offers to upgrade your software for free. That wouldn’t count as an offer, even if you accepted it, because both sides didn’t exchange something of value. Mutual consideration is an element of all contracts, and though the courts don’t typically determine whether a contract is fair, a lawyer from Weisblatt Law Firm will with regard to both parties.
If both parties aren’t receiving consideration with financial value, a deal isn’t considered a contract.
Mutual Assent (Meeting of the Minds)
It is at this point that the contract process becomes more formal, assuming it started informally. The details of the contract are hammered out, and both parties must agree to its final wording. If you haven’t already involved a lawyer before now, it’s best to hire our law firm to represent you before coming to mutual assent. For both parties to legally agree, there cannot be any misunderstandings or undue influence upon the agreement. Our legal team will work to prevent those problems, hopefully preventing future litigation.
Are you looking to enter into a strong contract to improve your Houston business? Call Weisblatt Law Firm at (713) 666-1981 to schedule a free consultation today.
Capacity to Contract
Not everyone is legally able to enter into a contract. Parties in a contract must be of legal age and mentally competent. (That isn’t to say that minors can’t enter a contract, but one involving a minor can potentially be voided when the same contract wouldn’t be for an adult.) If your business is seeking to enter into a contract with someone who may have limited capacity to contract (like hiring a minor as an employee), discuss your plans with your attorney first. While it may be legal to form the contract, you may have to jump through additional hoops or accept ending conditions that aren’t present in similar agreements.
Legality of Purpose
Another important element of a valid contract is the legality of purpose, which states that you cannot form an otherwise legal contract to perform or acquire illegal services. If any of the activities required of a party in a contract are unlawful, the contract will be voided partially or in whole by the courts. You could also face criminal charges, depending on what the contract required and what actions were performed. Experienced attorneys from Weisblatt Law Firm will advise you if any portion of the contract involves illegal activities. We cannot represent you during the signing of an unlawful contract and will discourage anything that could potentially get you in trouble with the law or otherwise void your contract.
Writing Requirement (Statute of Frauds)
While contracts can be oral, if you want the courts to enforce an agreement that has been violated, it should be in writing. Some contracts, particularly those that can’t be acted upon in less than a year, are required to be in writing, according to the statute of frauds.
Best Practices for Creating Valid Contracts
When writing contracts, the Weisblatt legal team will always use precise language throughout. That is to prevent any confusion and make it harder for the other party to get away with violating the contract. Additionally, while many contract negotiations start informally, we encourage our clients to put everything in writing from the very start. When we are involved from the beginning of the contract process, we document every step, which goes a long way in helping define the intent of a contract if that becomes necessary in court proceedings.
A Business Lawyer Can Help Provide Greater Confidence and Less Risk
Of course, there are several risks involved in entering a contract, the greatest of which is the chance that the other party breaches the contract altogether. At Weisblatt Law Firm, our team has extensive experience creating strong contracts and resolving disputes. If the other party violates the agreement, there is no need to panic. We are familiar with all Texas laws and court procedures; we’ll never miss an important step in the process or run afoul of the statute of limitations when litigating your case. The earlier you contact us before entering into a new contract, the better we can help you mitigate the risk of that contract.
Call Weisblatt Law Firm Today to Consult with a Business Lawyer in Houston
The right contract can be a significant boon for your Houston business. If you want to mitigate as much risk as possible when entering a new contract, the experienced legal team at Weisblatt Law Firm will help you throughout the process of entering into a new contract.
Don’t wait to speak with an attorney. Call our law firm at (713) 666-1981 as soon as possible when considering entering a new business arrangement with another party.
Attorney Andrew Weisblatt
Mr. Weisblatt has practiced continuously since becoming licensed in 1992 and has represented businesses ranging in size from one person start-up ventures to multi-national corporations employing hundreds of people in multiple countries. From 2005 through 2009 Mr. Weisblatt was in-house counsel and chief operating officer of a multi-national corporation in the steel products industry. That in-house position provided valuable insight into how businesses work and what they actually need from their lawyers – both in-house and outside counsel. Attorney Bio
