What Attributes Must a Business Contract Have?

Business Law Lawyer

Contracts are enforceable agreements which are lawfully executed and include details regarding a job or service rendered, or the purchasing of a product. It only takes one party within the contract to not hold up their side of the deal, for everyone else to experience delay or loss as a result of that breach. But, for the contract to be valid, it must have three specific attributes, which are listed as follows:

The Contract Must Exist

There must be documentation or proof that shows one party made a proposition, and that it was accepted by the other party. Furthermore, there must have been some kind of consideration exchanged between all the parties. Verbal agreements may or may not qualify a party for compensation. However, the best way to reduce the chances of a contract breach is through establishing a written one. 

The Contract Breach Causes Loss

A lawsuit can be filed against a business if the breach causes the non-breaching party some degree of loss or reduction in value. Usually, small breaches of contracts aren’t filed due to not being able to hold up in court. By comparison, larger breaches tend to result in more severe and extensive damages, ultimately leading to a lawsuit.

The Breach Can Be Proven

When the non-breaching party can prove what happened and how they experienced loss because of it, the court is likely to award monetary compensation for expenses, loss of money, and loss of time. In more serious lawsuits, the court may award punitive damages to the non-breaching party, which serves to further punish the breaching party.

Whether you are new to entrepreneurship or are seasoned in business, a breach in contract can happen. If it does, it is strongly advised that you speak with a dedicated business lawyer, such as a business law lawyer from Bott & Associates, LTD as soon as possible.