Sometimes we are so familiar with something that we lose sight of its importance. As a business owner, you deal with contracts often, possibly even on a day-to-day basis. So, you may not have considered whether your contracts are enforceable or not. Unless your contracts meet the legal requirements that make a contract enforceable, they may just be so much paper and ink. With any legal document, but especially with contracts, it’s crucial to have an experienced legal representative draft or at least review them. Are your contracts enforceable? That is precisely what we will cover in this article.
Some Elements That Make Contracts Enforceable Relate to the Document Itself
Contracts must meet certain requirements in order to be valid and enforceable:
- Offer. One party presents a proposal to another. “I’ll perform this service for you for $_____.”
- Acceptance. The party accepts the offer. “Yes, I agree to the price and terms.”
- Consideration. The parties agree on some type of consideration or remuneration. “Our company will pay $100 an hour for your accounting expertise.”
- Legal purpose. Performance of the contract cannot involve illegal acts. For example, one company could not agree to sell illegal drugs to another.
But there’s more involved than just the final version of the negotiated agreement.
Some Relate to the Signing of the Contract
The way the contract was signed and the parties themselves can affect whether a contract is enforceable.
- Mutual Consent. All parties involved mutually and voluntarily consent to the contract without duress or undue influence.
- Age. In most states, people below a certain age are considered minors and unable to enter into a contract.
- Mental Competence. The signers must be able to understand what they are signing, cannot be mentally deficient, or have diminished capacity due to dementia.
- Impaired. The parties cannot be under the influence of drugs or alcohol.
- Fraud. Contracts may be unenforceable when one party coerced the other through lies or misrepresentations.
Unenforceable contracts can be costly to your business.
Make Sure Your Contracts Are Enforceable.
Contract law is complicated. It is not easy to understand the legal terminology or the effects of most contracts. Always discuss contracts with your corporate counsel or a business attorney before signing one yourself.
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with business and litigation matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.