Whether your business is large or small, its success and your satisfaction are directly tied to the contracts you make with customers, vendors, and other companies. Strongly written contracts encourage respect, dispel confusion, and help avoid costly litigation. It’s essential to have a skilled lawyer on your side when it comes to contract issues.
Whether you need an experienced attorney to draft a business contract, review an agreement, or help enforce the terms of a contract, Hickory-based attorneys with Patrick, Harper & Dixon are at your service. We are here to help you and your business succeed, so contact us right away if you have questions about a business contract.
Elements of a Valid Business Contract
A contract is subject to invalidation if all the necessary components of the contract are not present.
The first important component is a meeting of the minds to determine the terms of the agreement. You and the other party must have a common understanding of the terms in the contract, and these terms must be clear enough that the court can discern the intention of the agreement.
Next, valid contracts of any type require an exchange of consideration. This is usually satisfied by the parties each agreeing to do something that they would not otherwise have to do. For instance, in the typical sales contract, the seller is agreeing to part ways with goods in exchange for your agreement to pay for them.
Last, the contract must be accepted by the parties. A party might accept a contract by signing the agreement and executing any supporting documents. In another situation, acceptance might entail actually performing the terms of the contract by shipping goods or preparing to perform the service.
An invalid contract may be unenforceable in some situations. That is why you should always speak with an experienced full-service lawyer about what contractual rights you have. Don’t leave anything up to chance when you are dealing with business contracts.
Common Issues with North Carolina Business Contracts
A hastily drawn or poorly drafted business contract can lead to a mountain of legal headaches and troubles for you later. These contracts can tie up you and your company in litigation that distracts you from running your business. Contracts might be poorly crafted if they do any of the following:
Use Ambiguous Terms or Leave Out Crucial Conditions
Contracts for goods or services should specify with detail the exact products or services that are at issue, who is going to provide those goods or services, and when and upon what terms. Where any of these terms are missing, it may fall to a court to resolve disagreements if you and the other party have a dispute about them.
A court may also choose to add terms it deems appropriate so that the contract can be completed, or it may invalidate the contract in whole or in part.
Fail to Specify What Constitutes a Breach
Your business contract needs to be clear about when a party has breached the agreement or otherwise violated the contract’s terms. When a breach occurs, the other party will be able to exercise legal rights and seek damages.
If breaches are not defined, then significant amounts of time and expense can be spent establishing that the other party has violated the agreement.
Fail to Address Damages in the Event of a Breach
If the other party breaks their contractual agreement, you may be entitled to financial damages. However, the amount of these financial damages may not be sufficient to compensate you for your time and inconvenience, especially if your actual monetary losses are minimal.
An appropriate damages clause contained within your agreement can help deter breaches and make it clear what the other party should expect if they do not hold up their end of the bargain.
Allow for Litigation When Alternative Dispute Resolution Options Could Work
Finally, a business contract may be inadequate if it fails to encourage or fails to limit dispute resolution to alternative options like arbitration or mediation.
Alternative dispute resolution (ADR) options can save your business time and money, but they may not be appropriate in all circumstances. Discussing ADR with an experienced Hickory attorney will help you decide whether such a provision belongs in your contracts.
Contact Patrick, Harper & Dixon for Assistance Today
Do not wait until you are caught up in a business contract dispute before seeking legal help. Patrick, Harper & Dixon, your full-service law firm in Hickory, NC, is available right now to help you proactively protect yourself and your business.
We can review your existing contracts and suggest improvements for future agreements. We can also help you see where terms may need to be renegotiated to best advance your interests.