Because strong contracts and contract relationships are vital to most businesses and business relationships today, it is helpful to know when a contract is valid and when it is enforceable. A contract is generally an agreement between parties concerning specific rights and obligations between the parties. A breach of contract can create a significant disruption for a business and may be damaging to business interests.
There are several elements that generally must be present for a contract to be valid and enforceable. A contract must contain an offer and an acceptance of that offer. In addition, there must be a bargained for exchange of something of value and the terms must be specific enough that they can be enforced. In addition, for a contract to be enforceable, the parties must have capacity to contract. This includes age and mental capacity. Generally, contracting parties must be older than 18 years of age.
A valid and enforceable contract must also be free of duress, undue influence, misrepresentation and fraud. Contracts should generally be fair and there are a variety of other considerations that may seem legally technical and complex. In circumstances when a contract is valid, a breach of contract may still occur, which can be devastating to a deal or business relationship. Different responses may be available ranging from negotiation to litigation depending on the circumstances and goals of the parties.
Because contract formation and contract enforcement can be complicated, it is important for businesses and parties entering into a business transaction to be well informed concerning remedies and rights associated with contract enforcement and breach of contract circumstances. Being knowledgeable concerning the components of a contract can be helpful for parties seeking to maintain a successful contract relationship.
Source: Smallbusiness.findlaw.com, “Will Your Contract Be Enforced Under the Law?” Accessed March 25, 2017