The Essence of Contract Law:
Contracts are legally binding agreements between two or more parties creating an enforceable obligation to perform or not perform certain things. Parties consist of individual persons or corporations competent to enter into a binding contract; in essence, they are not minors nor mentally disabled and are not deprived of civil rights. The six elements that make a contract legally binding are as follows:
- Extension of an offer along with the acceptance of the offer;
- The intention between the parties to create a binding relationship;
- Giving of or Consideration for the promise;
- Legal capacity of the parties to act;
- Genuine Consent of the parties; and
- The legality of the agreement. (Tadros, 2021)
If a contract lacks any one or more of the above elements, it is NOT a valid contract.
Contracts can consist in the manner of a verbal or written obligation. A verbal or oral agreement is binding in the state of Idaho unless required explicitly by Idaho law statue 9-505 to be in writing, which includes the following:
- An agreement that will take longer than a year to perform.
- Special promises to answer for the debt, default, or miscarriage of another except in cases provided for in section 9-506, Idaho Code.
- Agreements upon consideration of marriage, other than the mutual promise to marry.
- Agreements for leasing, for longer than one year, or for the sale of real property, or of the interest therein.
- The promise or commitment to lend money of fifty thousand dollars ($50,000) or more made by an individual or entity engaged in the business of lending money or extending credit.
While the above is required by law to have a written contract, it is always good practice to have a written agreement even when not needed, given the fact it provides an unequivocal record of the terms and the acceptance of them by the parties. While you can always draft a contract yourself, having an attorney draw up the contract guards against those unforeseen potential issues that can lead to a breach of contract.
Breach of Contract
Should one party break their commitment regarding the terms within the contract, known as a breach of contract. Then the non-breaching party can sue to ask the court to “enforce” the contract terms agreed upon between the parties, therefore, having the court order the breaching party to uphold their end of the contract. The two ways a breach of contract can occur are:
- One of the parties fails to perform the terms within the contract in the time agreed, or within a reasonable timeframe; or
- One of the parties’ conduct manifests an unwillingness or inability to perform the contract; considered an anticipatory breach where one does not intend to live up to his or her obligations under the contract.
Enforcing A Contract
When there is a failure of an informal resolution of a contract, one may look towards a more formal resolution such as mediation or a lawsuit. Mediation attempts to find an agreeable solution between the plaintiff, defendant, attorneys, and a neutral third party known as the mediator. Litigation, the legal term for a lawsuit, involves the plaintiff asking the courts to enforce the contract terms. Ideally, the parties subject to the contract would resolve their differences in a mediation setting, saving them hundreds to thousands of dollars compared to entering the court system, which many refer to as the lobster pot, easy to get into but hard to get out of and very costly.
Why Use A Lawyer
A contract lawyer has specific knowledge in drafting and evaluating contracts in the state of practice, such as choice of law, jurisdiction for enforcement, and mandatory arbitration clauses. Contract lawyers will know how to draft an enforceable contract where the terms are acceptable and valuable to the client being served. Should a dispute arise, contract lawyers understand how best to resolve the matter and advocate towards a resolution while keeping the client’s best interest in mind. Most law firms will offer a limited free consultation timeframe. Therefore, allowing the clients to present their contract needs and the lawyer the opportunity to evaluate whether the client indeed would benefit from having a lawyer draw up their contract or engage in a contract dispute. Dean Law, PLLC offers a 30-minute free consultation and prides itself on guiding clients to make a sound and informed decision.
Tadros, E. (2021, July). What is a contract? – Fitzroy Legal Service. Fitzroy Legal Service. https://fls.org.au/law-handbook/consumers-contracts-the-internet-and-copyright/how-contract-law-works/what-is-a-contract/
Contract Law – FindLaw. (2021). Findlaw. https://www.findlaw.com/smallbusiness/business-contracts-forms/contract-law.html#:%7E:text=Contract%20law%20is%20an%20area,take%20the%20problem%20to%20court.
