In most business transactions, the parties will enter into an agreement to specify their respective rights and obligations. In a purchase of goods from a store, for example, you typically receive a receipt that contains the terms of your transaction in clear language. A contract can come in all shapes and sizes. There may be basic one-page documents or lengthy multi-page documents which contain hundreds of detailed clauses. They expressly outline what each party is obligated to provide and each party’s rights in the transaction.
The Basics of Business Agreements
As a general rule, contracts are enforceable so long as they meet certain criteria. It must be shown that all parties have received “consideration” for the contract. A person cannot simply enter into an agreement without getting anything in return. For example, if someone signs a contract with you to do lawn work for them for free every week during the summer, then this is not an enforceable contract. The individual has provided no consideration or benefit in return for your promise to perform services on their property every week!
On the other hand, a valid contract must have a “meeting of the minds.” In other words, both parties to the agreement need to be in agreement about what they have agreed upon. A good example is when you agree on an exact price for some product or service with another person at a store and there isn’t any negotiating involved.
Agreements and Contracts Without Documentation
Both parties might not even realize that their transaction is an enforceable contract; this typically occurs when someone purchases goods from a merchant and does not receive any type of receipt for their payment that specifies any terms of the deal. This formality may also occur when someone offers services (such as fixing your car) and expects to get paid for them without explicitly stating in writing that he or she will perform the services for a certain fee.
In these types of situations, you might find yourself having to file a legal claim against someone because they have breached their contract with you. A breach occurs when one party violates the terms set out in a contract, either by failing to do what was promised or doing something that was not promised. When a person breaches a written contract, this obligates you to take up your end of it! If you are looking for help to enforce a business agreement, or to understand one before signing, please do not hesitate to reach out to us here at Bell & Shah. We want to help you be sure you understand anything you sign your name to.