Contracts form the backbone of your business. Depending on your company’s industry and size, you may have a handful of contracts, or you may have dozens or more. To protect your business interests, it’s essential to have a firm grasp of Texas contract law. Here’s what you need to know about express and implied contracts and other types of agreements you might come across.
The best way to ensure that your current contracts are meeting your company’s needs is to speak with a business lawyer. The right attorney can review your contracts and help you make any necessary changes.
Express and Implied Contracts
There are more types of contracts than many people realize. Two of the broadest categories are express and implied contracts.
Express Contracts
In an express contract, both parties enter into an agreement where the terms have been clearly stated, either orally or in writing. For example, signing a lease or agreeing to deliver groceries at a set time are both express contracts.
Implied Contracts
With implied contracts, the terms aren’t explicitly stated because they can generally be inferred. For example, when you order food at a restaurant, it’s implied that you’ll pay for it after the meal.
Oral and Written Contracts
Contrary to popular belief, oral contracts are often enforceable in Texas. However, they can be extremely difficult to prove. By contrast, written contracts provide evidence of the agreement, and the parties can refer back to the contract if there’s any uncertainty or confusion.
Bilateral and Unilateral Contracts
It’s also important to be able to tell the difference between bilateral and unilateral contracts.
Bilateral Contracts
In a bilateral contract, both parties make promises. For example, if you work with vendors, they’ll promise to deliver products, and you’ll promise to pay for them.
Unilateral Contracts
In a unilateral contract, only one party makes a promise. For example, if you offer a reward for finding your lost cat, you’re promising a sum of money to the person who returns your pet.
Contracts Under the Statute of Frauds
Some Contracts Must Legally Be in Writing
Texas has a law known as the “Statute of Frauds,” which states that some types of contracts must be in writing and signed. These include:
- A promise from an estate executor to cover any debts left by the person they represent
- Some types of healthcare agreements
- A promise from one person to pay for the debts or losses of another
- Prenuptial and postnuptial agreements
- Real estate contracts
- Real estate leases for more than one year
- Contracts that can’t be completed within a year
- An agreement to pay a commission for the sale of oil, gas, or minerals.
Even if the contracts you’re dealing with don’t fall under this statute, it’s still good practice to have all business contracts in writing. If there’s ever a dispute, having a signed and written contract should make resolving it much more expedient.
The right business lawyer can help you draft contracts that keep your company protected. Call The Weisblatt Law Firm, PLLC, at (713) 666-1981 to schedule a free phone consultation.
Valid, Void, Voidable, and Unenforceable Contracts
The fact that an agreement is written out and signed by two people doesn’t necessarily mean it’s legally enforceable. It’s critical to understand valid, void, voidable, and unenforceable contracts and what sets them apart.
Valid Contracts
A valid contract is one that’s enforceable by law. In order to be valid, a contract must meet the following criteria:
- Each party provides something.
- One party must make an offer.
- The other party must accept the offer.
- Both parties must be of legal age and sound mind.
- The contract must not involve illegal activity.
When you hire a business lawyer to create contracts for you, you won’t have to worry about whether they’re valid under the law.
Void Contracts
A void contract is one that neither party can enforce because it doesn’t meet the criteria to be a valid contract. For example, imagine an agreement between two friends stipulating that one friend will clean the other’s house in exchange for illegal drugs. Because possessing or trading drugs is against the law, such a contract would be void.
Voidable Contracts
A voidable contract is one in which one party has the option to void or reject the agreement, but the other party doesn’t. Contracts with minors are a common example. A minor can technically enter into a contract, but if they breach it, they may not be held legally responsible.
Unenforceable Contracts
If a contract is unenforceable, it’s valid but can’t be enforced by a court. For instance, if one party misrepresented themselves or used false statements to get the other to sign, the contract may not be enforceable.
Courts will also sometimes refuse to enforce a contract if its terms are especially vague. In this situation, the parties may both adhere to the contract if they wish. However, if one party breaches the contract, the other can’t seek damages.
Best Practices for Creating Contracts
Shielding Your Business from Future Disputes
No matter what kind of contract you’re creating, it can be helpful to keep the following best practices in mind:
Clarity and Specificity
Clear language that’s specific without being convoluted makes a contract easier to read and understand. The more thorough each party’s understanding of the agreement is, the less likely disputes will become.
Consideration
“Consideration” refers to an exchange of value. For a contract to be valid, each party must provide something substantial to the other.
Legal Review
It’s up to you to decide whether to have an attorney draft your contracts or draw them up yourself. Even if you create your own, however, it’s vital to have a lawyer review them.
Why Choose The Weisblatt Law Firm, PLLC, for Contract Law Matters?
Attorney Andrew Weisblatt has been practicing business law since 1992. He has represented small businesses and global companies alike, and he aims to build lasting connections with each client he works with. If you have a question about contract law or need help updating your organization’s existing contracts, he’s ready to help.
The Weisblatt Law Firm, PLLC, is here to help you resolve disputes and protect your business interests. Contact us today by calling (713) 666-1981 for a free phone consultation.
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
