Is your client or business partner not holding up their end of an agreement? Is there a misunderstanding of what each person’s duties or responsibilities are? Do you need additional help in settling the problem or getting your part of the agreement? Do you want to know if an agreement is even valid or legal? Contract disputes can be extremely overwhelming, especially when there is a lot at stake.
Hiring an experienced and qualified attorney to resolve disputes will be your best bet when dealing with complicated contracts. The attorney will help you understand the legal jargon and whether you have recourse to get what you are due when the other party is not meeting their responsibilities in a contract.
In this brief article, we will explain the elements of a contract, discuss how a contract attorney can help you resolve your contractual problems, and where you can go to get a consultation.
A contract is a set of binding promises that each party agrees to. These promises create obligations, responsibilities, or duties for each party that are enforceable by law.
Contracts must contain key elements before they are considered legally binding.
Those elements are:
Most contracts are written although oral contracts may also be considered valid. Oral contracts may not always be enforceable, particularly when they involve real property.
When drafting up a contract, one party usually extends an offer to take a specific action.
They may extend an offer to pay for a task or sell something at a certain price. An example is an employer extending a job offer to a potential employee for a specific pay and benefits package or someone offering to sell a car.
To complete the contract, the person to whom the offer is extended must accept the offer. The agreement can either be in writing or by spoken word and may occur in person, by phone, mail, or by an electronic transmission such as email. For example, if someone accepts a job offer, they must say "yes" to the terms in the job offer by signing the offer letter.
In the contract agreement, each party must provide something of value to the other party; this is called the "consideration." For example, an employee will give their time and hard work in exchange for payment from the employer. The mutuality of obligation is when each party agrees to perform its duty for the value it is getting. For example, an employer must pay their employee for the completed work.
An agreement in a contract is when all parties involved mutually understand the meaning of the terms stated in the contract and accept the terms. An agreement is also called a "meeting of minds." For example, when a homeowner and contractor agree to the price for a renovation, both understand and agree that the price includes the cost of labor, materials, and supplies.
Each party involved in the contract must have the legal capacity to be able to enter into a contract. If a party to a contract does not have the mental capacity to understand the terms of a contract, the contract would not be valid for lack of mental competency and capacity. As an example, if someone offered to purchase a house for an unrealistically low price from a senior citizen with dementia, that contract would be deemed invalid. The same would apply generally to contracts involving parties who are minors.
A contract must have a legal purpose that does not break any law. For example, it is not legal to hire someone to injure someone or to damage property. An agreement to commit an illegal act would not represent a legal contract.
If a party involved breaks their promise, then the harmed party may seek legal recourse for the broken promise to recover any incurred damages resulting from the broken promise. When someone breaks that promise or doesn't fulfill their end of the bargain, they are "breaching the contract." Contract breaches fall under two types of categories: a minor breach and a material breach. An actual breach of a contract typically results in damages. However, not all breaches by one party excuse the innocent party from performing their duty in the agreement.
A minor breach referred to as a partial breach, is a breach of contract that is less severe than a material breach and gives the harmed party the right to sue for damages. It does not, however, excuse them from performing their duty in the agreement. For example, John contracted Bob to build a greenhouse with four vents (Bob’s duty). As part of the agreement, John has to pay Bob for building the greenhouse (John’s duty). Bob only put in 3 vents. John may sue for the absence of one vent, but will probably not be excused from paying for the greenhouse as Bob has substantially fulfilled his end of the agreement.
A material breach is also known as a total breach and excuses the harmed party from further performance and giving him the right to sue for damages. A material breach is a breach that cannot be rectified making the contract completely useless. For example, Jane needed Joe’s telescope company to deliver a telescope in time for a solar eclipse watch party with Jane agreeing to pay Joe for the telescope rental. Jane had planned on charging party attendees to use the telescope. Joe delivered the telescope one day after the solar eclipse. Because Jane needed the telescope on a specific date for her eclipse watch party, no consideration by Joe would resolve the harm to Jane as the eclipse has already occurred. In this case, Jane will probably be excused from paying for the telescope rental but Joe may be liable to pay damages to Jane for her lost revenue.
Whether a breach is minor or material is determined by the court on a case-by-case basis based on the facts of the case. How the case is decided may be decided by the strength of advocacy by each party’s contract attorney.
Prior to signing any contract, it is always best to have your attorney review a contract to ensure that the terms represent your understanding of the agreement. If not, they can assist you in editing the contract to clarify and define any unclear terms before you sign the contract. This will help you avoid any future misunderstandings in the agreement.
If you are currently disputing the terms of your agreement, the contract attorney can advocate for you in helping define and determine your and the other party’s duties in the agreement so that any disputes can be resolved in your favor.
An alternative to going to court to resolve a contract dispute is to go through alternative dispute resolution, also called mediation. In mediation, an attorney may conduct a neutral and objective assessment of both sides’ arguments and attempt to achieve a solution satisfactory to both sides.
It is important that you consider engaging an experienced attorney when you have issues involving contracts. Recommendations from friends or family familiar with an experienced attorney may prove useful. Professional sites or bar associations listing attorneys certified in contract law may also provide guidance. A firm or attorney’s website may provide case histories and testimonials on success in advocating for clients. The internet has several sites with reviews on attorneys depending on specialty.
The cost of hiring a lawyer depends on the complexity of the case and the time necessary to win a case or arrive at a resolution. Keep in mind that some contracts require that a breaching party pay for the non-breaching party's attorney fees.
Contract breach attorneys handle many different tasks, such as reviewing contracts, negotiating the terms listed in the contract, and representing you in court. Make sure that you ask your attorney how they would bill you.
Some attorneys work based on a contingency fee, meaning that you do not pay anything unless you win your case. Knowing which fee structure an attorney uses will help you to understand the potential cost of engaging an attorney for your case.
If a party with whom you have a contract is breaching the agreement and you need assistance with obtaining your due consideration, you should retain a contract dispute attorney. Learning and understanding legal terms, court documents, court procedures, and court opinions can be overwhelming. Additionally, should there be any civil or criminal liability on your part, an attorney will guide you through the process to avoid or mitigate any liability.
Other situations when you should retain an attorney are:
Contact a contract attorney for a consultation. During the consultation, the attorney will be able to review your case and assist you in determining whether retaining an attorney is necessary and how they can help you with your case.
At the law firm of King & Jones, we believe in building close relationships with all our clients. Our experienced staff of attorneys can assist you should disputes arise, and will use their experience and expertise to provide the strongest advocacy in your case.
If you need assistance with contract issues and desire a strong advocate who will protect your rights, our team is ready to help you. We will be happy to discuss your situation with you, without cost, to see if we can be of assistance. Contact us now for a consultation.