Legal Question in Business Law in California

Re: Define a Contract and makes it enforceable or not

The answer to this question takes several weeks in law school, but the basics are: a meeting of the minds, which is expressed (ideally on paper), with agreement by each person to the contract. If an item is not included in the written contract, it may not be enforceable later, so write the important things down (when, where, what, who, how much, and what happens if the contract isn't followed).

The evidence of this agreement should be a signature by all parties involved.

If the contract deals with large values, or potentially large values, an attorney should be involved in at least reviewing it. If this is a contract for business services, it's likely there are forms out there (in the library or bookstores) you can use as a starting point.

Re: Define a Contract and makes it enforceable or not

The usual 'law school' definition of a contract goes something like this: A contract is a set of promises between two or more parties, for the breach of which the law provides a remedy.

Translated into more everyday terms, this means a contract is a set of promises that, if broken, could result in a successful lawsuit for damages. For example, if you agree to paint my house and I agree to pay you $1,000 for doing it, either of us could sue the other and expect to get some damages if the other breaks his promise. Therefore, the agreement is a contract. On the other hand, if Suzy 'stands up' Tommy on their date for the prom, he can't sue; this was a social agreement, not a contract.

Contracts require parties with legal capacity to contract, legal subject matter, and 'consideration,' which essentially means he who expects to get something must give something in return. Some contracts must be in writing, most do not. It is possible in unusual cases to create a contract by actions without any express written or oral exchanges of words; these are called implied contracts or contracts implied in fact.

A binding contract is formed when one party makes an offer and the other accepts the offer. Being able to recognize a legally-sufficient offer and acceptance requires training. Most advertisments are not offers, therefore a purported acceptance does not result in a contract binding the advertiser. There are exceptions.

No particular language is required in a contract. As noted above, contracts can be made without words. Nevertheless, good contracts should be in writing, and contain:

1) Identification of the parties;

2) What party X is to do for party Y;

3) What party Y must do for party X in exchange;

4) The time, sequence or duration of the performances to by furnished;

5) Any supporting promises, representations or warranties; and

6) What happens if problems arise during the course of the contract.

Law libraries have volumes of model contracts for various purposes, such as leases, purchase orders, employment agreements, stock options, and many more.

Drafting good contracts is an art and requires a combination of legal knowledge and a clear understanding of what the deal is all about.