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What is a business contract?

When it comes to business matters, transactions are frequently completed. While these are common occurrences, there are necessary components for these transactions to be properly executed. In many cases, this means drafting and entering into a business contract. Although these can have a routine feel to them, these are necessary documents, especially when they spell out specific terms and requirements.

What is a business contract? In simple terms, it is an agreement that is legally enforceable between two or more parties. These parties create an obligation to either do some or not do something. When entering into a business contract, three things must be present.

First, there must be an offer. This allows the party being presented the offer to reasonably expect that the other party is willing to be bound by the terms of the proposed offer. Next, there must be an acceptance. There must be a clear expression of the acceptance of the terms of the offer. Finally, there must be consideration. This is known as a bargained for exchange. Something of value must be passing from one party to the other.

Sometimes, when contract disputes arise, a party may argue that the contract is not valid or properly entered into. In these matters, it may be necessary to look at these three things to determine if there is a valid contract. Even when a contract is proven valid, one could assert that there has been a breach. Such matters could result in business litigation with the non-breaching party seeking damages.

Business law matters can be complex, often impacting major deals and the normal course of business. In these cases, it is vital to explore what options one might have to resolve these matters and keep the interests of the business in mind.

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