Key Things You Need to Know About Contracts

Almost everyone knows what a contract is, and most people have even signed them at some point. Many people, however, have a misconception about some of the details regarding what they are and how they work. This can put you or your business at risk of legal consequences. While it is best to always have an attorney create or review contracts before they are signed, make sure you at least know the following key points that are commonly misunderstood.

Not All Contracts Must Be Written, But Some Contracts Must Be in Writing

When most people think of contracts, they picture a document that was typed out using very precise language. While this is definitely the most commonly used type of contract for business agreements, it is not the only type of enforceable contract that can be used. The courts have routinely determined that many types of verbal agreements can carry the same legal weight as a written contract. Thus, while doing business via handshake is never recommended, a handshake is sometimes enforceable. 

Under New York Law, some contracts must be in writing in order to be enforceable. Some examples of agreements that must be in writing include: an agreement that is, per its terms, not to be performed within a year of its making or within the lifetime of one of the parties; an agreement to sell real property, other than a lease for less than a year; agreements that are promises to answer for the “debt, default, or miscarriage of another person;” and agreements to pay for negotiation services or representation in the buying, selling, or renting of real estate or a business opportunity. Each business deal should be evaluated to determine whether it falls into a category of agreements that is required under New York law to be in writing. 

Not All Written Contracts Are Enforceable

For example, if you have a written agreement that involves some type of illegal activity, the courts may rule that it is invalid even if both parties entered into the agreement willingly.

If you have a written contract that does not include a clear offer, acceptance, and consideration, it may also be held to be unenforceable. This is why it is so important to make sure that you have an attorney either write the contract entirely, or at least review it, before you sign. This will help avoid any risk that it will not be enforceable should there be a dispute.

Protect Your Business Interests with an Attorney

Whether you are entering into handshake agreements or formal written contracts, it is always a good idea to run it by your attorney. Contact Canales PLLC to schedule a consultation to discuss your needs today.

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Canales PLLC

As a minority-owned law firm with experience across a broad range of industries and subject matters, Canales PLLC understands the importance of creating diverse, client-centered solutions that cater to each client’s particular needs.

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