Contracts
Contracts, no matter how large or complex, are nothing more
than a promise or a series of specific promises. No more, no
less. In the event that a contractual promise is broken, the
law and the contract itself provide remedies to compensate the
damaged parties.
In addition to many other documents, our contract attorneys
can draft;
- artist representation contracts
- asset purchase agreements
- assignment agreements
- assumption agreements
- confidentiality agreement
- consulting agreements
- copyright license agreements
- development agreements
- distribution agreements
- due diligence agreements
- employment agreements
- escrow agreements
- finders fee contracts
- first right of refusal contracts
- franchise agreement
- guaranty agreements
- indemnification agreements
- independent contractor agreements
- lease agreements - commercial real property
- lease agreements - personal property and equipment
- letters of intent
- loan agreements
- licensing agreements
- license and royalty agreements
- mergers and acquisitions
- mortgages
- non-compete agreements
- non-disclosure agreement
- powers of attorney
- promissory notes
- releases
- rescission agreements
- security agreements
- settlement agreements
- share exchange agreements
- shareholders agreements
- stock option plans
- stock purchase agreements
- sublease agreements
- subscription agreements
- underwriting agreements
- warrants and options
Certain criteria must be met in order for the parties to the
contract to be protected. The parties must be competent and
the contract must be based on something that has a measurable
value. This element of value is referred to in contract language
as the "consideration."
Statutory law may require some contracts be put in writing and
executed with particular formalities, for example contracts
for the purchase and sale of real estate, guarantees, and contracts
of employment in excess of one year. Otherwise, the parties
may enter into a binding agreement without signing a formal
written document.
Privity of Contract
Normally only parties to a contract have the right to enforce
its terms. This is known as the "privity of contract"
rule. In some circumstances third parties who are known beneficiaries
to a contract have rights to enforce and sue for breach of a
contract. For example:
- Agents, or employees who obviously accept or offer a
contract not in their own personal names but on another
person's or a corporation's behalf.
- Checks, promissory notes, bearer bonds, and negotiable
instruments transfer are enforceable by their holder and
may change hands, from one bank to another or from one person
to another.
- Contracts that restrict or impact upon the use of land
may be enforceable upon adjoining landowners, even though
they were not privy to the original contract.
- The law of trusts creates rights in third parties such
as beneficiaries and trustees.
Consent
For a valid contract to exist, all parties must be capable of
consent.
Minors and mentally-challenged persons may void a contract at
their option. A drunk or intoxicated person also lacks the capacity
to consent to a contract and has the option of voiding a contract
signed while intoxicated, providing it is done at the earliest
opportunity upon sobriety. A contract accepted under threat
of physical, mental or economic harm, may be voided by the party
so threatened as under "duress". Acceptance must be
freely given.
Consideration
Consideration is a right, interest, profit or benefit accruing
to the one party or some forbearance, detriment, loss or responsibility
given, suffered or undertaken by the other.
- The consideration must be reciprocal; each party offering
consideration.
- Motive is different from consideration. Your motive for
contracting is your personal reason for contracting. Consideration
is objective not subjective.
- The consideration cannot be something or some act which
is illegal, immoral or contrary to public policy. If a certain
act is punishable by some law, then it is "illegal".
An example would be a work contract to an unlicensed electrician.
Offer & Acceptance
Each contract requires an offer and acceptance of that offer.
An offer must be clear, unequivocal and directed at another
party to the contract. An offer, once made, can be revoked
before acceptance. Acceptance validates the contract. Acceptance
must be clear, unequivocal, and unconditional and made by
the person to whom the offer is intended.
Mistake & Misrepresentation
If one or both parties have been mistaken about an element
of the contract, then the contract may not be valid.
Misrepresentation exists when one of the parties to a contract
makes a wrong statement about some material element of the
contract and, in reliance of this statement, the other party
entered into the contract.
Restraint of Trade Contracts
In contemporary commercial environments, restraint of trade
contracts in the form of non-compete and non-circumvent agreements
are common. On their face, such contracts, while not illegal,
fly in the face of public policy as it is considered to be
"good for the state" that men and women be free
to ply their profession without restriction. Accordingly,
state and common law set forth stringent standards of fairness
for such contracts.
Assignment
A person can transfer their rights, benefits and liabilities
under a contract to another person unless such assignment
rights are limited or eliminated in the contract itself. Personal
service contracts may not be assigned, such as an agreement
with a particular actor or performer.
Frustration
No person can be held to a contract if, since acceptance,
there has been a radical change which makes performance impossible
or illegal. For example, an act of God may have destroyed
the object of the contract. However, frustration cannot be
invoked just because the contract has suddenly become more
difficult or expensive for one of the parties.
Interpretation of Contracts
The courts are frequently asked to resolve disputes surrounding
the meaning of certain words in contracts. A wide range of
general interpretation rules guide the courts in their inevitable
(and unenviable) task of having to interpret a contract which
is ambiguous. A court will not try to re-write a contract
using interpretation rules but, rather, to use these rules
to pinpoint the intentions of the parties at the moment of
contract.
Breach and Remedies
Breach of contract comes in many forms. A complete breach
exists when one party completely refuses to deliver on any
part of their undertaking. A partial breach exists when a
person may do part of what the contract requires but omits
or refuses to complete the residual portion.
Although usually monetary damages are awarded, in some circumstances
the non-breaching party may obtain an award of specific performance
or injunctive relief.
Enforceability
Our contract attorneys understand that a well written and
enforceable contract means financial success for our clients
and their businesses. A well-written contract typically requires
less time and money to enforce in the event of an unanticipated
dispute. Because of our strong business perspective, Legal
& Compliance, LLC is well versed in the practical applications
of contracts.
Each and every contract we draft is the culmination of years
of commercial experience coupled with the knowledge that no
two business scenarios are ever quite the same. Our contract
attorneys create documents that are most suitable to helping
our clients protect their hard-earned business and personal
interests. We strive to anticipate the unanticipated.
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