Do you feel confident about the contract you are about to sign? Have you considered whether the contract terms are supported by consideration? Is the contract fair and reasonable? Are both parties benefitting? Our Orlando construction attorneys understand how overwhelming contracts can be, but contracts need to be drafted correctly in order to be enforceable in a court of law. In this article will discuss what makes a contract valid and what can make a contract void. Visit Part 2 for the remainder of the article.
What Makes a Contract Valid
Briefly, we’ll describe what elements validate a contract. First, a legal offer must be made and that offer must be accepted by consenting contract parties. Second, value and benefit must be received by both parties as a result of the contract. Third, although there are some cases where contracts can be verbal, generally the agreement must be in writing.
It’s important to understand the difference between a contract that is void and one that is voidable. In simple terms, a contract is null and void from day one due to reasons that deem it unenforceable according to state or federal law. An example of this is allowing a minor to sign a contract. On the other hand, a voidable contract is one that can be invalid if one or both parties don’t agree with some aspect of the contract. An example of this is would be breaching certain terms of the contract.
If a court finds a contract or part of a contract to be unjust or extremely one-sided, the court may deem the contract voidable. An example of this would be the purchase price for materials that are excessive and unjustifiable.
When a mistake is made that affects the contract in whole materially, whether by either or both parties, the contract is unenforceable. Here one or both parties are mistaken and these mistakes are referred to as unilateral and mutual mistakes.
Nondisclosure is another form of misrepresentation. Parties have a duty to disclose certain information when asked.This happens when one party purposely withholds facts that would be essential to the agreement.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.