Business contracts, are an essential component to operating a business. As a business owner, it’s important that you have a clear understanding of business contracts, especially considering they will likely be something you will execute during business dealings. It may be tempting to form deals based on handshakes, and taking people’s words for it. However, by doing so, it may be more difficult to enforce a business deal, or have certain legal protections in the event that something goes wrong. Business lawyers will tell you of the essential role that contracts play in the business world. Here are the answers to a number of questions frequently asked by business owners today:
What is a business contract?
A business contract is a legally binding document that is agreed upon by two or more parties. A contract can be legally enforceable when something of value has been exchanged. In most cases, this can be either goods or services. A contract can be made:
- In Writing
- By Taking Action
However, to ensure that your contract outlines the details of the agreement, it’s always a good idea to get the contract in writing. This can make it easier to manage disputes or enforce your contract in court as you will have a written document to refer back to.
When should I have a business contract in place?
You may be wondering when business contracts are necessary. It’s important to note, that when one party does not uphold their end of an agreement, it could be detrimental to a business. Because of this, even the smallest of businesses should have business contracts in place that are legally enforceable. This should occur anytime that there are goods or services being exchanged. This can help to legally protect a small business in the event the other party does not uphold their end of the deal.
What elements are key to include within a business contract?
A contract should include the following elements to ensure that all key details are incorporated into the agreement. Key elements that make up a business contract include:
- An Offer
- An Acceptance
- Mutual Agreement
- An Exchange of Value (usually money)
What makes a contract valid?
In order for a business contract to be valid, they must include the elements listed above. There can be a lot riding on business contracts that a business owner has in place. Making it essential that executed contracts are valid. Because of this, it may be a good idea to acquire the assistance of a business lawyer, to help ensure that significant business dealings have clear and concise contracts in place.
What can I do to enforce an agreement that is not being followed?
When a contract is not being followed, the other party may be in breach of contract. When obligations are not being fulfilled, it can have a significant impact on your business, and your reputation. Because of this, it will be important that you take prompt action in the event that the other party is in breach of the contract you both mutually agreed to. Should this occur, you should attempt to resolve the situation, however if your attempt to do this has failed, your next step should be a call to a business lawyer. Not only can a business lawyer help you to take legal action in the event that there is a breach in contract, they can assist in the creation, review and execution of contracts for your business.
For further information regarding the importance of business contracts, and the essential role a business lawyer can play, contact a business lawyer in your area today.