Why Every Business Needs Contracts and Negotiations

You can’t operate any business without having some sort of interaction or relationship with another party: your employees, clients, contractors, vendors, distributors, and so on. Contracts are legal instruments that facilitate and govern these arrangements, establishing the terms, conditions, and parameters within which the parties operate. They are what allow you to get things done, while at the same time protecting you from potential risks and liabilities. Their crucial role in every aspect of business is why only qualified legal experts should assist you with Contract Drafting and Negotiations.

Contracts 101

In simple terms, a Contract is an agreement between individuals or legal entities (such as businesses) wherein one party agrees to provide a service or good in exchange for some form of compensation (monetary or otherwise) by the other party. The key aspect of any Contract is that one side makes an offer and the other accepts it. But this alone is not enough to create a legally binding pact, e.g., the kind that can be recognized in the court of law in case a dispute arises.

For example, you can’t have an effective Contract for something that is illegal or impossible, nor can you make a Contract with someone that doesn’t have the capacity to enter into the agreement, such as a minor or fictional entity. These might seem like frivolous examples, but they show how important it is for Contracts to be sensibly written.

Furthermore, for a Contract to be binding on both parties, there must be what is known in Contract Law as “consideration” — the actions, promises, goods, services, or money that are being bargained for between the parties. This is the essential reason for forming a Contract, and it must be something of value to the parties that each is willing to exchange for fulfilling a certain obligation.

Say you want to remodel your business space. You hire a renovator that will do the job in exchange for money. In the Contract that you will have drafted for this work, the consideration on the part of the renovator is the remodeling work, which will be done in exchange for your consideration of monetary compensation. Because you each have something of value to gain — something to offer and accept — you have the basis for a binding Contract.

Note that a consideration can also be not to do something — for example, in an Employment Contract, the consideration being offered by the employee to the employer, aside from doing their job, is to not divulge trade secrets or work for a competitor.

Contrary to popular belief, a Contract can be binding and legally enforceable even if it is verbal. However, Florida law does require certain types of transactions to be governed by a written Contract, and it is advisable to have any agreement in writing in order to make the contents easier to determine and prove if a misunderstanding or dispute arises.

How Jurado & Farshchian Can Help

A Contract is not something to be taken lightly. Once the parties sign, they are legally bound by the terms and promises of the document, provided it meets the above criteria. Conversely, if a Contract is poorly written or missing some critical elements, it can leave one or both parties open to legal action, or can possibly be dismissed as invalid by a Court of law.

Never sign or make a Contract without the help of a qualified legal expert like those of Jurado & Farshchian. Our attorneys are familiar with every facet of Business and Contract Law, and will know what to look for when reviewing a Contract or making one. Our Contracts are drafted with the interests of our clients in mind, with clear and concise language that minimizes misinterpretations and liabilities.

We have experience in Contract Drafting and Negotiations for all sorts of critical business functions, from employment to non-competition. We take the time to understand our client’s needs and what the particular relationship entails, so that we can create a more effective and protective Contract. We are always on call to carefully review any Contracts you are presented with to ensure nothing is amiss prior to signing.