Important Elements You Need in Any Solid Business Contract

 Posted on May 21, 2021 in DuPage County Business Law Attorney

There are several reasons why contracts are used in business. Contracts are commonly used when a business is formed, when it is sold or purchased, when it buys supplies and goods from other vendors, and when it sells its own goods or services to its customers. A contract spells out what each party should expect to give and to get in a certain situation. For a contract to be enforceable and upheld, it must be valid. There are certain specific elements that a contract must contain in order for it to be considered valid, which is why consulting with a business lawyer is a smart idea when forming or signing a contract.

Elements of a Contract

In the business world, a contract can appear for a variety of reasons. However, not all contracts are enforceable or even valid. When you do business, you should be sure that your contracts are clear and unambiguous to avoid any misunderstandings or confusion. When creating a contract for any reason, the contract should contain:

• The parties addressed in the agreement - The first element that should be included is the parties that are included in the agreement. If you are creating a sales agreement, you would include your business’s name and your customer’s name, indicating who is the buyer and who is the seller. If you were creating an employment agreement, you would include your business’ name and the name of your employee. This section typically also addresses the “consideration” of the contract or a simple explanation of what the contract is to do for each party.
• The main purpose and terms of the contract - Next, the meat and potatoes of the contract are included -- the main terms and conditions. Typically, this portion of the contract is extremely detailed and specific. This is where the actions of each party are written out and explain what each party is expected to do. If you are creating a sales contract, you would include the price of the goods or services, a description of those goods, how delivery is to take place, any warranties included with the product, and how payment is to be made.
• Any additional terms in the contract - You can also include additional terms in a contract that are supplementary to the main terms. Things such as how the contract can be terminated or how disputes arising from the contract can be handled are typically included here.
• How the contract is to be signed and accepted - Here you can include stipulations as to how the contract must be signed. In some cases, a person may need to sign the contract in the presence of certain people in order for the contract to be valid. In other cases, multiple signatures may be required to ensure the contract is valid.
• Which state’s laws govern the contract - If you and the person you are entering into the contract with are in different states, it is important that you designate a specific set of laws that govern the contract. State laws are not always the same when it comes to business issues, which is why you should specify how the contract is to be governed.

Our DuPage County Business Contract Lawyers Are Here to Help

At Stock, Carlson & Duff, LLC, we will not only help you create your business contracts, but we can also assist if any disputes arise related to those contracts. Our skilled team of Wheaton, IL business contract attorneys have the experience needed for swift and effective action in any situation. To schedule a consultation, call our office today at 630-665-2500.

Sources:

https://www.entrepreneur.com/encyclopedia/contracts

https://smallbusiness.chron.com/seven-elements-business-contract-60025.html