Understanding Contract Law Basics
Contracts can cover agreements between parties for goods and services. They can also lay the groundwork for an agreement not to do something. As long as it is legal to do so, parties can enter into agreements for just about anything. All contracts, however, have some fundamental elements in common.
The OfferAll contracts first require an offer. An offer details a proposed course of action, such as "I will paint the exterior of the building for $5,000," or "I will provide 600 reams of copy paper if I can use your copier to create my flyers," or "I won't build a structure on my land that blocks your view of the ocean in exchange for an easement in the form of the current driveway."
AcceptanceValid contracts require not only an offer, but an acceptance of the offer, as is. For example, taking our painting example above, if the building owner says, "Okay," to the offer to paint the exterior of the building for $5,000, there is acceptance. If, on the other hand, the building owner says, "I only want to pay $4,000" or "I want you to paint the exterior, the stairs, and the parking lot," this is not acceptance. Instead, this is considered a counteroffer.
If a counteroffer is made, the process begins again and the party on the receiving end of the counteroffer must now accept the terms. This can go back and forth until both parties come to an agreement and an offer is accepted.
ConsiderationConsideration is a legal term which means "something of value." In our examples above, the consideration includes $5,000, 600 reams of copy paper, and an agreement not to block the neighbor's view. While money is certainly something of value, it is not the only thing legally considered valuable. As long as the consideration is something of value, it likely meets the requirements for a valid contract.
Contracts - From Drafting to EnforcingFrom your cell phone provider to your vendors, contracts are put into place and relied upon every day in business. As you consider entering into agreements with vendors, subcontractors, and third parties, consider hiring an experienced attorney to draft your contracts and review the contracts of others. When a party isn't upholding their end of a bargain, an attorney can assist you in enforcing the contract previously entered into.