Contracts are the foundation for many business relationships. Contracts are crucial for defining the rights and obligations of the parties to the contract, which is why businesses should understand the components of a contract and how they can respond if a dispute arises.
Crafting sound contracts from the start
At the very basic level, a contract begins with an offer by one party and acceptance by the other that mirrors the offer that has been made. Business professionals can often benefit from working with an experienced business law attorney from the start when negotiating, drafting and executing contracts. Doing so can help ensure that the language is airtight and the terms are as favorable as possible.
An attorney can also ensure that your contract or agreement complies with the correct set of rules, whether that is the Uniform Commercial Code (UCC) or the original common-law structure. Generally, the UCC applies to contracts or agreements when at least one of the following provisions has been met:
- The purchase or sale of goods in excess of $500; or
- At least one of the parties to the contract is a merchant who handles the goods or services stated in the contract for a living.
Understanding what set of regulations governs your contract from the start can be helpful, especially in the event that a dispute arises later.
Potential remedies available after a contract breach
A contract breach can occur when one of the parties does not honor its obligations or fulfill its duties according to the contract. Based on the circumstances, different remedies may be available to the non-breaching party, including monetary damages, specific performance or cancellation and restitution of the contract. Business owners facing the impact of a breach of contract on their business should understand the contract basics and their rights if a contract they are party to has been breached.