Contracts FAQ

What are Contracts?

Contracts are a written agreement between two or more parties, intended to not only outline the details of said agreement but to serve as evidence that an agreement between the parties does in fact exist. Contracts can be used to serve virtually any kind of lawful agreement, ranging from the purchase of property to royalty agreements.

Though contracts are fundamental to doing business in today’s world, it’s also worth mentioning that they are just one type of legal form. Other legal forms – such as notices – might not require that two parties sign them in order for them to still be considered valid.

What are contracts best used for?

Like any legal tool, contracts are best used when they suit the situation. Contracts are unnecessary for certain arrangements and may be considered standard procedure for others. For example, a bank is not going to be willing to make a loan without a contract in place that guarantees the agreement’s security. But you don’t need your in-laws to sign a contract to stay in your home for a few days.

Contracts are best used to protect interest, particularly financial interest. Any time a significant financial transaction or agreement is made, a contract is usually appropriate – even between family members and close friends. Contracts are also effective at reducing liability, as is the case for many types of release forms.

When is a contract “ironclad” in the eyes of the law?

Many people make the mistake of assuming that they are entitled to legal victories simply because of the presence of a contract. However, it’s important to recognize that a contract is still subject to a number of variables, including a state’s local laws, the context and the circumstances of the case, and even the contract’s validity.

A written contract, for example, is not the only type of contract. An oral agreement can also constitute a contract in many cases if it can be proved that the oral agreement took place. One great advantage of a written contract is that it not only provides for the agreement to take place, but also doubles as proof that the agreement exists.

All conditions being relatively ideal, a contract will always be enforceable under the law. However, it is a mistake to assume that the existence of a contract will always make an agreement ironclad; there may even be language in the contract itself that can nullify the agreement in certain circumstances.

What circumstances would render a contract invalid?

Understanding a contract’s validity is an important step in understanding contracts themselves. Here are a few conditions that must be satisfied in order for a contract to be considered valid:

Age: When a minor signs a contract, it has to be approved by their legal guardian or else the contract can be considered invalid.
Mental state and coercion: If a contract is signed when one of the parties is in a poor mental state (or are somehow coerced into signing the contract), it’s possible that the contract may be thrown out. This is why it is illegal to force someone to sign a contract at gunpoint, for example.
Consideration: Even though two parties are essentially free to agree on just about anything, they cannot enter into an illegal agreement. This is why consideration – or some sort of value received – must exist for both parties. Otherwise, the contract might result in some sort of slavery or servitude which would not be legal in the U.S. Employment contracts and leases are prime examples of contracts with full consideration for each party involved.

If any of the above conditions is not lawfully met, then a contract may be considered invalid. The result is that contracts must be two-sided, lawful agreements. After these conditions are met, two parties could technically agree to any type of deal they want.

When is a contract “enforceable”?

A contract’s enforceability differs from its validity; it’s entirely possible that a contract would be considered valid but not enforceable. For example, a contract signed in 2012 that did not begin its true terms until 2014 would essentially be “unenforceable” for the two intervening years simply as a matter of practicality.

For that reason, much of the enforceability of a contract depends on the provisions and language of the contract itself. For example, a contract can be rendered somewhat moot if a provision is activated; for example, a contract is fully capable of invalidating itself. That’s why it’s important to know the full language and provisions contained in the contracts you sign; it may help you “get out of it” should the need arise.

What if I’ve already signed a contract and need to modify the terms of the agreement with the other party?

This is actually a common occurrence, and comes in the form of additional contracts: extensions, revisions, and amendments. These agreements will, of course, require the consent of both of the parties involved in the original contract; without this dual consent, there’s no point in seeking any further modifications. However, if both parties agree to the modifications, just about any part of the contract terms can be altered to suit the circumstances. It’s important that this be done correctly, of course, in order for the new contract to hold up against the old one.

How do I know it’s okay to sign a contract?

Provided that you’ve done all your research, that you trust the other party, and that you’ve sought all the legal advice you need, it all comes down to a matter of instinct. However, it’s important to consider that for many people, the signing of the contract is the moment an agreement becomes “official.” This depends upon your definition of “official.” You may have agreed to the terms of a contract months ahead of signing it; if so, then your work should be in ensuring that a contract validly and explicitly lays out all of the terms you had expected. Once you are confident that a contract contains exactly what you want it to contain, go ahead and sign.

Contracts and Agreements

The foundation of most agreements is a contract. A contract is merely an agreement by which two or more parties each promise to do something. This simple definition of a contract can encompass incredibly complex agreements. The objective of a good contract is to clearly set out the terms of the agreement. Once the parties have reached an oral understanding of what their agreement should be, the terms of the deal should be put in writing.

Contrary to what many attorneys may tell you, the written contract should be clearly written and easily understood by both parties to the agreement. It should be written in precise and unambiguous terms. The most common causes for litigation over contracts are arguments over the meaning of the language used. Remember that both sides of the agreement should be able to understand and agree to the language being used.

A contract has to have certain prerequisites to be enforceable in court. These requirements are relatively simple and most will be present in any standard agreement. To be enforceable, a contract must have consideration. In the context of contract law, this simply means that both parties to the contract must have promised to do something or forego taking some type of action. If one of the parties has not promised to do anything or forgo any action, he or she will not be able to legally force the other party to comply with the terms of the contract. There has to be some form of mutual promise for a contract to be valid.

Another requirement is that the parties to the contract be clearly identified and the terms of the contract also be clearly spelled out. The terms and description need not be complicated, but they must be spelled out in enough detail to enable the parties to the contract (and any subsequent court) to clearly determine what exactly the parties were referring to when they made the contract
The following documents are included for use in situations requiring a basic contract. There are documents for assigning, modifying, extending, and terminating a basic contract and much more.

Contract Forms Combo Packages

Popular - Contract Forms Combo Package containing some of the most often used contract forms. Included are a general agreement, contract amendment and mutual rescission of contract. An agreement is also included which will terminate an existing contract.

Agency Agreements
Agency Agreements for use when it is agreed that one party will act as an agent for the other. This agreement sets out all relevant terms as the party who is... View More
Amendment to Contract
Amendment to Contract to be used when an existing contract must be amended. This amendment sets out in specific detail the provisions to be amended and those which... View More
Arbitration Agreements
Arbitration Agreements which offer a less expensive and quicker alternative to the court system. This agreement spells out the terms which the parties agree to abide... View More
Artwork Agreements
Artwork Agreements for use when hiring an artist to create a work of art for your home, office or commercial property. This agreement spell out the type of artwork,... View More
Assignment of Contract
Assignment of Contract to be used when assigning rights under a contract to another individual or entity. This assignment includes parties to the assignment,... View More
Confirmation, Change Orders, Certificates & Consents
Confirmation, Change Orders, Certificates and Consents for use in a variety of situations. Included are a General Authorization which authorizes a certain action,... View More
Employment Contracts
Popular -Employment Contracts for use in a variety of employment situations. Included are employment agreements for key personnel, general employment agreements and a... View More
Finders Fee Agreement
Finders Fee Agreement for use when one individual (or firm) seeks out a business relationship on behalf of another. This form sets out the specifics of this type of... View More
Franchise Agreement (Restaurant)
Franchise Agreement between a company which has developed proprietary know-how about running a restaurant and an individual or entity who desires to purchase a... View More
Franchise Agreements
Franchise Agreements designed for use when franchising a business. This form sets out specific terms including business standards, representations and warranties and... View More

General Agreements & Contracts
Popular - General Agreement or Contract providing a standard form agreement for use in business transactions. This form sets forth the necessary provisions to be... View More
Graphic Designer Contract
Graphic Designer Contract between a client and graphic designer who will plan and devise a project. This form includes specific details of the project including a... View More
Manufacture of Goods Contract
Manufacture of Goods Contract between two companies for the manufacture and distribution of certain goods or products. This agreement sets out all terms including... View More
Notices for Contracts
Notices which relate to contracts. These attorney-prepared forms include a notice of breach and assignment which can easily be tailored to fit your unique needs. Why... View More
Rescission & Termination
Rescission and Termination forms to be used when rescinding or terminating a contract or agreement. These forms contain all terms including all obligations of the... View More
Royalty Agreements
Royalty Agreements between a writer and a publisher wherein a publisher agrees to pay royalties for the publication and reproduction of a composition. This form sets... View More
Sale of Business Contracts
Popular - Sale of Business Contracts for use when selling or purchasing a business. Included are Sale of Business and Sale of Business Asset contracts which contains... View More
Sale of Goods Contracts
Sale of Goods Contracts for use when selling goods or products. Included are basic and standard contracts for sale of goods and a contract for sale of goods on... View More
Waivers & Extensions
Waivers and Extensions for use in a variety of contract and business-related transactions. Included are agreements which will extend time for performance and closing... View More

Free Products

Book Publishing Agreement

This Book Publishing Agreement is between a publisher and...
Content Provider Agreement

This Content Provider Agreement is between a content writ...
Ghostwriting Agreement

This Ghostwriting Agreement is between an author and an i...
Merger Agreement

This Merger Agreement will effective merge two companies ...