A breach of contract can be a significant distraction for a business and can also potentially damage the business. For that reason, business owners should be familiar with the legal resources available to help them in breach of contract situations and generally understand the components of a contract.
Contract disputes can cause businesses significant damages. Businesses impacted by a contract breach should know how they can protect themselves and the damages that may be available to them. There are several elements to a valid contract it is helpful for businesses impacted by a contract breach to be aware of.
- Offer: The contract relationship begins with an offer. The offer is what the party is agreeing to do or not do according to the contract. The offer must be clear and specific enough to be enforced.
- Acceptance: An acceptance is an agreement to the conditions of the offer. The acceptance of the offer must be voluntary.
- Consideration: Consideration is what one of the parties will pay to complete the contract. Payment is loosely used in this contract because it may not always mean money but may instead mean something of value.
- Legal intent: Legal intent requires the parties to the contract to intend to enter into the contract. The contract must also adhere to the laws and regulations of the state where it is entered into to be considered valid.
- Competency: Competency is also required for a valid contract which means that the parties to the contract are of legal age to sign a contract, they have mental capacity to understand they are signing a contract and they are not impaired at the time of signing the contract.
When a contract has been breached, the non-breaching party may have legal remedies available to them to help with the damages they suffered because of the breach. Because of the damaging impact a contract breach can have on business it is necessary to be familiar with business litigation options and resources.