The business law attorneys at Snee, Lutche, Helmlinger & Spielberger, explain how to construct a legally binding contract.
It is always recommended that you have an attorney draft or review any contract that you intend to use. However, it is also important that you understand the essential components of a contract. Below, the attorneys at Snee, Lutche, Helmlinger & Spielberger have provided information on what constitutes a legally binding contract.
Basic Components of Every Contract
Some contracts can be intimidating, as they may contain language that can be confusing for some parties. Other contracts, however, are quite simply stated—so simple, in fact, that you may not realize when you have entered into a contractual agreement. While many supplemental components may be included, there are two critical components that any legally binding contract must contain.
An Agreed-Upon Exchange
A contract must serve to establish that there is an agreed-upon exchange taking place. This exchange must be of value to all parties involved, and may constitute transactions such as the transfer of money, goods, services, or may represent the commitment that an exchange will take place at a later time. Because of this, the contract must explicitly define what is being exchanged.
Party Agreement
A legally binding contract must show the parties’ agreement to the exchange. This indicates to all parties that a proposal for the exchange of goods, services, money or the promise of a later exchange has been made and accepted by all involved.
Contract Stipulations
These components are important to understand, as there is no guarantee that every contract you encounter will be in writing. Essentially, a contractual agreement exists if one party makes an offer that another party accepts. This can include situations wherein one party has verbally offered to conduct a service for another, and the second party accepts that offer of service. Within the scope of the law, this agreement may be binding.
Similarly, once an offer for an exchange has been made and accepted, the party making the offer cannot rescind it unless the parties have established a date of expiration. Typically, once both parties have accepted, an agreement is considered to be legally binding, whether oral or written.
Consult the Harford County Business Attorneys at SLH for Assistance
The Bel Air attorneys at Snee, Lutche, Helmlinger & Spielberger have a wealth of experience and possess the skills necessary to handle most of the legal matters that a business will encounter. This includes drafting letters of intent, and negotiating and drafting contacts on behalf of our business clients.
We work closely with our clients to ensure that the needs of their business are satisfied and are ready and willing to represent each of our clients and their business in any litigation matters that arise. For additional information on contracts and other business agreements, contact Snee, Lutche and Helmlinger, P.A. today!