A large number of business disputes involve an alleged breach of an agreement between the parties. The first question the courts will consider when presented with such a dispute is whether there is legally recognizable contract between the parties. To establish that a contract exists, a plaintiff must prove that:
- there was a “meeting of the minds”: (in others words, an actual agreement was reached);
- one party offered to enter into the agreement and the other party gave some outward indication that they accepted the offer;
- the parties each promised to exchange something of value; and
- the terms of the agreement were reasonably certain.
In most instances, a contract does not need to be written to be valid and enforceable. However, the failure to memorialize an agreement in writing leaves both parties vulnerable to a prolonged lawsuit regarding whether a contract was formed and, if so, what were the terms of the contract. Generally, when an agreement is in writing, the court does not need to look any further than the written agreement itself to determine whether a contract was formed and evaluate the contractual rights and obligations of the parties. In contrast, when there is no written agreement, the parties may be forced to engage in extensive and costly discovery with respect to these issues.
Although it may seem burdensome to always put your agreements in writing, it could save you and your business significant litigation costs down the line. Additionally, a written contract – especially one drafted by an attorney – can be tailored to protect you in the future (by, for example, including a provision that if you need to bring a lawsuit against the other party due to that party’s breach of the contract, you will be permitted to recoup your legal fees).
Spector & Ehrenworth, P.C. has extensive experience representing clients in drafting business contracts and litigating contractual disputes. Attorneys at the firm would be happy to discuss with you the specifics of your case and help you to determine how best to proceed. To schedule an appointment to speak with a business attorney, call (973) 845-6525 or e-mail firstname.lastname@example.org.