If you sign a contract with someone else, you likely expect them to follow through with the terms of the contract. The sad truth is that there are many people who don’t fulfill their obligations to others. Some people will intentionally try to defraud others. Others may default on contractual obligations due to unforeseen circumstances, like a sudden illness.
If you have to take legal action over a contract issue, you need to be confident that your contract is both valid and enforceable. How can you tell if that is the case?
A valid contract meets the basic rules for a legal agreement
For a contract to be valid, it should contain certain features. These features include a specific offer, valuable consideration for that offer and formal acceptance of the offer. Each party should have something to gain from the contract, and both parties must understand what the agreement entails.
An enforceable contract sets terms the courts can uphold
You can potentially draft a contract that the courts cannot enforce. For example, if you include terms that violate state or federal law, the courts won’t enforce the contract even if it is otherwise valid. Non-compete agreements are an example of a clause that the California courts will usually not uphold even if the contract that contains the agreement is otherwise valid.
If your contract is both valid and enforceable, then you can go to court after a breach of contract to ask for help. Learning more about contract law can help you draft workable contracts and enforce them if others don’t follow their written agreement with your company.
