6 Essential Items That Make a Business Contract Legally Enforceable

 Posted on November 11, 2020 in Business Law

If you are an entrepreneur who is just getting started building your business, or even if you have been a business owner for decades, it is important to be cognizant of business contract essentials to avoid running into difficulties down the road. Those who fail to adhere to the following six requirements could end up with an unenforceable agreement with a business partner, vendors, employees, and anyone else with whom you draft and sign a contract. 

Official Agreements

Business law can be complicated, especially for first-time business owners. While it is never advisable to rely solely on your limited legal knowledge during business negotiations, it is always a good idea to have a general understanding of these requirements:

• Offer, Acceptance, and Mutual Consent: These three requirements are grouped together since they relate to the agreement itself and both parties’ intentions entering into it. Every contract must explicitly outline a specific offer and the acceptance of that offer. This consent must be given by free will; if either party claims that they are forced or coerced into the agreement, the agreement can be easily invalidated. By following these three conditions, the parties have intentionally decided to create a binding agreement.

• Value Exchange: In order for the agreement to be considered a business contract, an exchange of value must be made. This may include money, services, or both, but value must be exchanged by both parties, not from one party to another. If only one party exchanges value, it will be considered a gift, not a contract.

• Competence: To be sure that both parties were fully aware of the contract and agreement being made, both parties must be of “sound mind.” This means that neither party can be minors, both must be sober (of alcohol and drugs), and neither can be mentally deficient. If it is found that any of these competency requirements are not met, the non-competent party is no longer obligated to uphold their end of the contract.

• Legal Purpose: Contracts may only be enforceable if the business that is included in the document is legal. For instance, you cannot create a legally enforceable contract for illegal dealings, such as selling drugs. While you can technically create an agreement for actions such as these, they will not be legally enforceable in a court of law.

A final consideration that you should have while building business agreements and relationships is to put everything down in writing. While verbal contracts may be enforceable in some cases, these are much more difficult to prove in a court of law. Failure to get your contract in written form can lead to a flimsy and inconsistent agreement as well as difficulties defending your end of the bargain in the event that you ever need to go to court.

Contact a Fort Lauderdale Business Lawyer for Help

The best way to go into a business contract is by turning to a reputable business attorney for help. Attorney Gavin Elliot makes the business contract formation process collaborative, allowing you as the business owner to outline your terms and conditions, while he drafts the document to align with these objectives and make it enforceable in court. Elliot Legal Group has offices in both Fort Lauderdale and Miami to assist a wide range of clients along the Gold Coast. For help with all of your business needs, contact our Broward County business law attorney at 754-332-2101 today.

Source:
https://www.thebalancesmb.com/basics-of-business-contracts-and-agreements-397811