Contracts are one of the most misunderstood concepts in the business world. Every single day, people enter into what they think are legally binding contracts, only to discover that those contracts are in complete violation of the law. Whether a contract is designed to protect your best interests or not, it is imperative to learn how to tell whether a contract qualifies as a legally enforceable agreement or not. Otherwise, you or the other party may get a whole lot more - or less - than you'd bargained for.
Understanding The Basic Definition Of A Contract
Many different things can come into play when a contract is entered into by two parties. Your specific circumstances may vary, which is why it is always wise to have a lawyer look everything over on your behalf. Still, having a decent grasp of the basics can help.
Keep these points in mind when it comes to contracts:
- The concept of "mutual consideration" refers to the basic tenets of a contract. Each party must be receiving something of value under such an arrangement. Typically, one party receives something of value - like property - and the other receives money.
- Depending on the language and terms of a contract, it may be very easy to breach it. You must tread very carefully in such situations.
- There is a whole different set of rules when it comes to using an oral contract. Many times, an oral contract may not be enforceable under law. Always check with an attorney to see whether or not your oral contract will hold up in a court of law.
- In general, it is always best to have a written contract in place. Such a document will more adequately protect your rights and will more specifically spell out the various obligations of each party.