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What makes a business contract legally enforceable?

Nearly every Texas business deals in contracts. These agreements can be with vendors, suppliers or customers, among others. What they all have in common is that they must comply with the law in order to remain valid.

If a contract does not comply with the laws applicable to it and you become embroiled in a dispute regarding the contract, it may not hold up in court. What you may have thought was a simple case of breach of contract could end up costing you time, money and effort if the contract fails to legally bind you and the other party.

What do you need to make a contract legal?

In order for a contract to withstand legal scrutiny, it must include the following basic elements:

  • An offer: You offer to provide goods or services and agree to follow through on that offer.
  • An acceptance: The other party accepts your offer.
  • Consideration: The other party provides you with goods, services, money or something else valuable to you in exchange for your goods or services.

Whether it's the offer, acceptance or consideration, specificity is key. Your contract outline in writing all of the terms to which each party agrees. Any room for interpretation could create issues for you in the future.

What happens if one party fails to adhere to the contract?

If one party fails to fulfill his or her end of the bargain as outlined in the contract, a breach of the contract may have occurred. Before going to court, it may be possible to use an alternative method of dispute resolution such as mediation or non-binding arbitration. If resolving the dispute outside of isn't possible, a lawsuit may be the next step.

In order to file a lawsuit, you will need to show the court that you suffered harm because of the other party's inability or refusal to comply with the terms of the contract. Should the court determine that a breach occurred, it may consider awarding both monetary and non-monetary damages.

It may not be as simple as it sounds.

Proving that a breach occurred and that harm resulted may sound easy, but in many instances, it's not. Gathering the appropriate evidence to substantiate both halves of the claim may require obtaining documentation or statements from the other party and, possibly, witnesses. The legalities involved in obtaining these necessary components can be complex and even frustrating.

If you find yourself in this position, seek advice from a legal professional who has the experience with contract law that you need.

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