This section concentrates on some matters that are relevant when considering the contractual process, whether at national or international level. It is intended for information purpose only and does not substitute a legal advice. A specific legal advice should be sough in relation to your specific circumstances. At Palazzo Law Boutique a contract law specialist is always available for legal help.
What is a contract?
A contract is a legally enforceable agreement between two or more parties as long as certain conditions are met. It fulfils several functions. For mentioning some, it spells out the right and obligations of the contracting parties and manage any potential risk arising out of the contractual relationship. Moreover, it outlines a contingency plan for the contracting parties in case that the contractual scheme breaks down.
What makes a contract enforceable?
There are essentially various elements of a contract that make it a legal and binding document. In order for a contract to be enforceable, it must contain:
- An offer that specifically details exactly what will be provided.
- Acceptance, or the agreement by the other party to the offer presented.
- Consideration, or the money or something of interest being exchanged between the parties.
- The capacity of the parties to contract. It is an element that requires parties to be of mature age, free of mental illness and not intoxicated. In English law, for example, a party may lack capacity if at the time of contracting he/she is either temporally or definitely able to make a decision.
- The intent of both parties to be bond.
- Object of a contract is legal and not against public policy or in violation of a law.
Is a contract required to be in writing?
In day-to-day business, according to the law governing the contract, some deals may be concluded with a handshake. In California, for instance, certain agreements can be oral and still be legally enforceable. However, it is always advisable that a contract is written and signed by the parties involved. This will ensure as long as possible that the parties have a clear understanding of their contractual rights and obligations. As opposed, in absence of a written contract, a contracting party might be liable for something he/she never intended.
The contracting parties may be individuals, corporations, partnership or governments. Therefore, should you deal with an agent or a corporation, for example, make sure that the party you are contracting with has the requisite authority to contract.
When drafting a contract, either intentionally or due to an oversight, you might not regulate some rights and obligations therein. These terms, s0-called “implied terms”, may be read into the contract pursuant to the law governing the contract.
Can you adapt a contract to changes in circumstances?
Yes, you can. The parties are able to insert into the contract various provisions according to which the contract can be adapted to changes in circumstances. By doing so, they make sure they can face such changes without provoking a breach of the contract or evoking some kind of formal dispute resolutions.
Such provisions include:
(i) Force major clause.
This clause excuses the parties from performing their contractual obligations when certain circumstances beyond their control arise, making performance inadvisable, impracticable, illegal, or impossible. The parties should duly specify such circumstances in the contract.
(ii) Modification clause.
This clause permits the parties to modify the contractual terms according to changes in circumstances.
(iii) Several clause.
It allows the parties to remove from the contract an invalid, enforceable, or illegal clause.
Can the parties renegotiate a contract?
Yes, they can. By means of a renegotiation, once a disagreement occurs, the parties can attempt to find a mutually solution to their difficulties. The redrafted contract should reflect the results of the renegotiation in turn.
In light of the above provided information, it is highly advisable to be assisted by a contract law specialist throughout the contractual process. By doing so, it is possible to address at the early stage legal issues that might arise out under the contract. Please do not hesitate to contact us if you have any questions or any other issues. A contract law specialist looks forward to hearing from you soon.