The basics of business contracts

On Behalf of Dunlap Fiore, LLC |

Businesses of all shapes and sizes will likely become party to a variety of contracts during the course of operation. Contracts are just part of business, including contracts with vendors, employment contracts and real estate contracts. So, companies in Louisiana should know some of the basics of business contracts.

First and foremost, every contract must have two important aspects: offer and acceptance. This means that both sides understand exactly what is being offered and by whom, and that after that there is a mutually recognized acceptance of the offer. Both sides must be able to fully understand the deal, and understand what is being exchanged, such as services, goods or cash.

Next, it is generally a best practice to ensure that all contracts are in writing, even if, in some cases, a written contract isn’t necessarily legally required. Putting the terms of a contract in writing and getting the signatures of the parties involved helps to avoid contract disputes by making sure that all of the parties know what to expect from the deal.

Lastly, even though no company enters into a contractual relationship with the expectation of a breach, it can be important to put terms in the contract that govern what occurs in the event of a breach. These terms can include the requirement for binding arbitration or even which laws will govern the results of any dispute. This can help when it comes time to enter into litigation about what has occurred that goes against the terms of the contract.

Source: FindLaw, “Contracts FAQ,” Accessed April 8, 2017