Developing contracts is an essential component of any business, and because of their complexities, a Business Litigation Lawyer, companies recommend can help to ensure that contracts are clearly outlined for the parties involved. Large and small businesses require contracts because they protect businesses when they enter into agreements and help improve the company’s value proposition. While most larger companies have teams of lawyers to represent them in their business agreements, small to midsize companies may not have ready access to a lawyer. Because of this, some business owners may enter into contracts that do not have their best interests at the forefront or lack the proper protections should something go wrong. All businesses need a lawyer from Eric Siegel Law they can turn to for help answering their contract-related questions and representing them in their business dealings.
Why are contracts necessary?
Contracts help outline the terms of agreements between two or more parties entering into a business relationship with one another. Having clear terms in place helps to protect these relationships, which are integral for the success of a business. Contracts are essential for many reasons:
- They prevent conflicts from arising
- The require negotiations that ensure favorable outcomes for all parties
- Contracts can help to communicate expectations
- Can help to increase revenue streams
- Contracts outline the rights of all parties
What are common types of business contracts?
Our Washington DC business litigation lawyer can share that all parties are legally obligated to adhere to the terms when a contract is drafted, reviewed, and ultimately agreed upon. Business owners will come across a variety of arrangements throughout their tenure in business, some of the most commonly used contracts include:
- Employment Agreements
- Partnership Agreements
- Nondisclosure Agreements
- Bill of Sales
- Licensing Contracts
- Promissory Notes
- Indemnity Agreements
What components must be included within a contract to be valid?
There is more to a contract than writing an agreement to ensure it is valid. Contracts are imperative to business dealings, and for them to be valid, they must encompass several vital elements. The following are necessary for a contract to be a legally binding agreement:
- An Offer (verbal or written)
- Acceptance of the Offer
- Mutuality of Obligation
What if a contract was not in writing?
While a verbal contract can be valid, it’s best to put things in writing for several reasons. A written contract ensures that the terms of the contract are clearly outlined, financial obligations are agreed upon, and there is a clear direction for how parties will manage disputes. They are also more easily enforced in court. When a contract is not in writing, a breach of contract can cause several problems, and it can quickly become a case of he said/she said.
What are the consequences of a breached contract?
A breach of contract can be incredibly damaging; not only can it impact the reputation of a business, but it may also require business litigation and result in significant losses for the parties involved. The first step will be to contact a lawyer. Sometimes through the negotiation process, it may be possible to resolve the situation and allow the party in breach the opportunity to uphold their end of the agreement. However, when a contract is breached, litigation may be necessary, and the party who has not followed the terms of a contract may be required to pay:
- Compensatory Damages
- Punitive Damages
- Nominal Damages
- Liquidated damages
To discuss contract disputes, contact Eric Siegel Law for a full case review to determine the best course of action forward.