Contracts are powerful legal documents. They put into terms the agreements that parties make regarding diverse professional relationships such as employment, sales of goods, and attainment of services. When Chicago-area businesses take their business contracts seriously, they protect themselves from future litigation and legal challenges.
This post does not offer its readers any legal advice. Readers are advised to use the contents of this post as learning tools to build their understanding of contracts. They may then take their specific questions to their trusted business law attorneys for consultations and case reviews.
The basics of a business contract
A contract is an agreement between two or more parties. It is made up of several key elements. Those elements include:
- An offer: A party offers a product, service, or other item to another party in exchange for some type of compensation.
- An acceptance: The party receiving the offer accepts the terms of the offering party’s proposal. The receiving party can choose to counter-offer or reject the offer as well.
- Consideration: The parties exchange consideration – often payment for services or products rendered – to seal their agreement.
Without an offer, acceptance, or consideration, a party may have difficulty proving that they had a contract with another entity or individual. It is sometimes in the presentation of these and other contractual terms that conflicts and legal challenges arise.
Conflict in contractual terms
The details of a contract are often where problems and questions arise. For example, if a party did not specify when they required delivery of products from their contractual partner, when would the contractual partner be required to provide the stipulated goods? In a week? Or a year? The failure of the parties to work in an important provision or multiple important provisions may mean losses and other consequences for the involved businesses.
Specific terms can be incorporated into contracts to protect the parties and set clear expectations for the performance of their contractual duties. Attorneys who work in business and contract law can help their clients protect their rights as they establish and execute strong business contracts.
