Preventing Contract Misunderstandings

Yee Law Group Inc. > Preventing Contract Misunderstandings

Business Contracts Lawyer Folsom, CA

When contract disputes arise due to a party not upholding his or her role in the agreement, it can result in costly and disruptive losses. What may have started off as a simple miscommunication, now may have turned into a very heated conflict. Those who are considering getting into a contractual agreement with another person may want to have a better understanding of how and why such contracts are established, before signing on the dotted line. Those who are interested in writing a contract may consult with an attorney prior to it being finalized, as a way to help ward off any potential future misunderstandings.

What are the elements of a contract?

When a contract has been created, there are usually five elements that are present. The more clear and well-drafted the contract, the more likely all parties involved fully understand what is expected of them. The five elements of a contract are listed here:

  1. An offer or job has been made to another party
  2. This offer or job has been accepted by the other party
  3. Terms and other considerations are agreed upon by all parties
  4. Every party has an intention to create legal relations
  5. There is good faith that the contract terms shall be upheld

Does a contract always have to be in writing?

It is generally recommended that all contracts be in writing, but verbal agreements may also be considered binding by law. While oral contracts can be legally enforceable, it is still best to create a written document that is signed by all parties. This can help motivate each party to keep their end of the bargain and can be used as evidence in the event a dispute comes up. However, do keep in mind that depending on what the contract entails, a written contract may be required by law.

What solutions may be used for a breach of contract?

When one party fails to fulfill a portion or an entirety of responsibilities, there are several resolutions that may be used to amend the contract breach. Depending on the terms of the contract and resulting losses, these solutions may be used:

  1. Damages = the innocent party suffered damages or financial loss, in which a monetary amount is awarded as compensation.
  2. Specific Performance = an order made by the court that requires a party in the contract to complete a positive obligation under the contract.
  3. Injunction = The court may command a party to perform a negative obligation, in which they are ordered to do, or not to so something.
  4. Rescission = the court may set aside the contract, in which both parties are put back into a position they were prior to the agreement being established.

At what point during the contract creation should I reach out to an attorney?

It is not uncommon for the parties interested in making a contract together, to meet with an business contracts lawyer Folsom, CA trusts at the Yee Law Group to review the agreement. An attorney can evaluate the contract to determine if each party’s rights are protected, if there are loopholes, or whether certain terms need clarification.