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What Makes a Contract Unenforceable

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In simple terms, contract law governs creating and enforcing agreements. Contracts are critical but complicated components of the construction process. Construction professionals should be aware of and understand the formation of contracts and their key elements. If you lack confidence in your ability to understand the ins and outs of a contract, you should always consult a construction lawyer in Brentwood, TN for legal guidance to ensure you are signing a contract that is fair and profitable.

What Makes a Contract Valid

For a contract to be valid and enforceable by a court, it needs to meet six requirements. Keep in mind that these elements may vary slightly by name and definition based on industry.

  1. Offer: a specific, complete, promise by one party to another that is capable of acceptance and made with the intention to bind by acceptance.
  2. Acceptance: a final approval/acceptance of an offer.
  3. Consideration: something of value exchanged or promised.
  4. Capacity: each party is fully capable of agreeing and entering into the terms of the contract.
  5. Consent: each party voluntarily enters into the contract.
  6. Legality: except where permissible, contracts should be submitted in writing to be enforceable.

Why a Contract Might Be Invalid

Once you understand what makes a contract valid, you are better positioned to identify contracts that are unenforceable. Here are some reasons why a contract may be considered invalid and therefore unenforceable.

  • Unconscionability: Harsh or grossly unfair contract formation or terms that gives one party superior bargaining.
  • Mistakes: Unilateral mistakes can result in one party having an unfair advantage while a mutual mistake voids a contract.  
  • Misrepresentation and Nondisclosure: Using tricky tactics to get another person to enter into an agreement or failing to disclose certain information (when asked) to intentionally withhold facts that would be essential to the agreement.
  • Duress and Undue Influence: Applying pressure or undue persuasion (e.g., a threat of repercussions for not signing) to get someone to sign a legally binding contract renders the contract unenforceable.

Should You Hire an Attorney to Review Your Contracts?

The construction industry involves a wide variety of legal documents that can affect how a project is going to play out. Whether your agreement is fair or one-sided, once you sign on the dotted line, you are bound to its terms and conditions. There are a number of reasons why you should seek a construction attorney in Brentwood, TN. At Cotney Construction Law, we have extensive experience in reviewing and drafting contracts and can facilitate the process for you. A contract review will help you reduce your risk exposure, ensure that your contract reflects current laws, and give you options so you can have more control over the risk you do assume.

If you would like to speak with a construction law attorney, Brentwood, TN, please contact us today.

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.