The construction industry is heavily contractual. Contracts serve many purposes but their main purpose is to outline the rights and duties of the parties involved and allocate the risk between those parties. When contracts are not executed properly, costly disputes are bound to happen.
With the help of one of our Sarasota construction attorneys, your contracts will meet the requirements of basic contract law. Read this section and part two to learn about the elements that make a contract enforceable, ways to improve your contract, and elements that invalidate a contract.
6 Elements of Legally Enforceable Contracts
For a contract to be enforceable, it must include specific elements, and both parties are expected to fulfill the terms of the contract. The contract must contain the following elements:
An offer: Willingness of parties to agree on certain terms with an understanding that the contract is binding.
An acceptance: A final expression of consent to the terms of an offer.
Competent parties: Parties must have the capacity to enter into a contract.
Consideration: Each party must benefit from the contractual agreement.
Legally-binding subject matter: Contract subject matter cannot be prohibited by law or violate public policy.
Mutual obligation: Parties must be intentional and in agreement on the terms of the contract.
Factors That Make a Contract Unenforceable
Construction contracts are entered daily but too often many professionals enter these agreements without realizing it could be unenforceable. This could happen for several reasons:
Duress: Threatening or coercing someone into making an agreement.
Impossibility: If a party cannot carry out the terms of a contract due to some unpreventable circumstance or reason.
Mistake: One or both of the parties make a mistake that has a significant impact on the agreement.
Lack of Capacity: Parties must be of age and have the mental capacity to perform and understand the agreement.
Misrepresentation: When a party makes a false claim, omits, or conceals agreement.
Nondisclosure: Neglecting to disclose important facts when asked about the agreement.
Unconscionability: When one or more terms of the contract are unfair or unjust.
Public Policy: A contract that poses harm to either party or society.
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.