Business Law / Contract Law

A commonly misunderstood fact is that most contracts are oral and not written. Another surprise is that the overwhelming majority of contracts are followed without the need to involve lawyers and the courts. In that rare circumstance where there is a need to force compliance with an agreement, it is important to know that certain agreements must be in writing to be enforceable.

The subject of agreement must be in definite and certain terms. Consideration means actual value being exchanged between persons; where the consideration offered is illegal, impossible, or none is offered the consideration is called illusory and will not support the existence of a contract. Consideration can be anything from money to a promise to perform. The parties must also have capacity. For example, a minor does not have capacity to enter into contracts unless the minor has been emancipated from his/her parents by operation of law. A person who is incompetent also is not able to enter into contracts. Much of the litigation over agreements is because the parties are not happy with the deal they made wish to get out of it. In that event, courts may allow a party to breach their duties to strictly follow the contract, but they will still owe damages to the other party in the form of the money they agreed to pay, or profits that were lost by the other party due to the breach.

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