Contracts
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What is a contract? A contract is a promise, usually made by two people. If one party breaks the promise, the law gives protection to the other party. The protection is usually that the person who broke the promise must either do what he or she promised to do, or pay money to the other person.
To have a contract that the law says is good there must be an offer, an acceptance, and consideration.
An offer has three parts: First, the person making the offer must intend to enter into a contract at the time he or she makes the offer. Second, the terms of the contract must be definite and certain. That is, at the very least, they must identify the parties in the contract; what the contract is about; the time during which the contract is to be completed; and the price; and the offer must be communicated to the other party.
One problem that often comes up is: How long does the offer stay open? If I offer today to sell you my boat, can you accept the offer a week from now? A month? A year? Five years? The length of time an offer will stay open should be given by the person making the offer. The second part of a contract is the acceptance. A person must accept an offer that has been made. For an acceptance to be good, the person must accept the offer exactly as it was made. For instance, if I offer to sell you my boat for $l000 and you say you will buy it for $750 there can be no contract because you did not accept my offer. You made a counter-offer. If I agree to your counter-offer of $750 we have made a contract. I give you the boat and you give me the money.
You must give your acceptance to the person who made the offer or a person authorized to receive it. If you tell my cousin that you accept my offer, your acceptance is no good unless I authorized my cousin to act on my behalf.
The third element necessary to make a good contract is "consideration". Consideration is money or something of value. In most contracts one party must do something for which the other party must pay money. However, if I tell you I will give you my boat if you help me build my house, and you agree, we have made a contract. In consideration of your labor on my house I will give you my boat.
So, the parts necessary to make a contract that the law will help you enforce are really simple: An offer, an acceptance, and consideration. Problems usually come up because the parties don't clearly agree on what is to be done.
How can you avoid problems? The best way is to put the agreement into writing and have both parties date and sign it. The agreement does not have to be prepared by a lawyer or trial counselor (although it would be better to do so). Almost any agreement in writing, if it has all the elements of a contract, can be enforced in a court of law if a problem comes up. Remember: contracts can be complicated. If you have any questions, you should ask a lawyer or trial counselor to prepare a contract for you. Never, never sign a contract unless you have read it and completely understand it.
People often wonder if a spoken contract is good. The answer is yes but it is not a smart thing to do. If you have only a spoken contract, and an argument with the other party starts over what the terms of the contract are, how can you prove who is telling the truth? You can not. Also, for the same reason, it is very difficult to enforce an oral contract because in court one person will say one thing and another person will say something else. How can a judge decide who is telling the truth? It is a lot better to put every-thing on paper, not only so it can be enforced later, but also to make sure that you and the other party really agree about what the contract is about and the time in which the contract is to be performed.
If one party tricks another party into entering into an agreement, there is no contract.
Also, a court will not help a party enforce an illegal contract. If someone loans you money and charges 25% interest, a court would not enforce the part of the contract which calls for 25% interest because the legal rate of interest is less than that.
Usually, a contract made by a person under the age of eighteen years is not a good contract because the person is not considered an adult. There are exceptions to this rule, however.
Also, a person who is not mentally competent cannot usually have a contract enforced against him although, again, there are exceptions to this. Finally, if a person is so drunk or drugged that he or she cannot understand the nature and the consequences of the contract, it will not be enforced.
Where one party forces the other to enter into a contract, the contract is no good. For example if your neighbor threatens to beat you up unless you sell him your truck, there is no legal contract.
A contract for the sale of land or any interest in land must be in writing, signed by the parties.
Anybody can write a contract. However, it is a good idea to have a contract prepared by a professional, who can advise you what terms to include and how to protect yourself.
If the parties to a contract have put it in writing, and then later they want to change one of the terms of the contract, the change must also be put in writing. A court will not consider testimony that a written contract was changed by spoken agreement between the parties.
The area of contracts is one of the most complicated in the legal profession. Although most contracts are simple and parties perform them with no problems, when a problem does arise it is often necessary to go to court to have a judge settle the issue. To avoid problems later, you should always think hard about your contract and then put it in writing.
Please remember that the information in this website is general in nature and may not apply to every fact situation. If you think you have a legal problem, see a lawyer for advice.
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